As Bitcoin (BTC) hovers near its lowest levels since late 2024, a market observer suggests the flagship crypto may not have finished bottoming yet, with more downside potentially ahead.
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BTC’s Historical Data Points To Longer Correction
On Wednesday, analyst Rekt Capital compared Bitcoin’s current price action to its performance in previous cycles to determine how close the leading crypto’s market bottom may be.
In a video analysis on X, the market watcher explained that BTC’s deviations from previous all-time highs (ATHs) could serve as key reference points for this assessment. Notably, Bitcoin bottomed 22% from the 2017 peak during the last cycle’s correction. Now, it is trading roughly 14% below the 2021 peak of $69,000, which could suggest the bottom may be approaching.
However, the analyst affirmed that this metric alone “doesn’t represent the mosaic of data that we need to be paying attention to.” He stated that the length of previous bear markets is a crucial indicator to factor in, noting that, historically, Bitcoin bear markets tend to last at least one year, sometimes extending beyond that.
For instance, the flagship crypto took approximately 365 days to complete its full corrective phase during the 2021-2022 bear market. The current pullback has lasted about 240 days so far, which would depart from historical behavior and make it significantly shorter than previous cycles if the bottom is already in or close.
If the current cycle follows a similar timeline to previous ones, BTC could have at least 120 days left in its corrective phase, with the bottom likely occurring around October and the possibility of further extension if the cycle mirrors longer historical patterns.
Bitcoin Bottom Another 20% Below?
The analyst highlighted that while the duration of the bear market is important, the depth of its retracement is another crucial factor. Last cycle, Bitcoin dropped 77%, while it declined 84% during its 2018 bear market.
Nonetheless, the pullback has only reached 53% so far this cycle, suggesting there may still be room for additional downside. Based on this, he emphasized the trend of shallower bear markets, with the correction’s depth progressively diminishing roughly 7%-10% each cycle.
If this pattern repeats, Bitcoin could see a potential retracement near 70% this cycle, placing BTC’s bottom in the high $30,000 range. Meanwhile, if the shallowing trend accelerates toward a 10% reduction, the bottom could form near the low $40,000 region.
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These factors point to a critical period over the next four to five months, the analyst affirmed, in which another leg down of up to 20% remains possible. He noted that similar phases have historically included periods of consolidation followed by additional declines before the final bottom forms.
Ultimately, Rekt Capital asserted that this period is crucial as it lays the foundation for the next bull cycle. “This bear market here (…) precedes an entire period of multi-year upside. And I think that’s why it’s important, as a result, to focus on the importance of this bear market bottoming out period over these next few months because we’ll then see a multi-year period of upside,” he concluded.
Featured Image from Unsplash.com, Chart from TradingView.com
