Bitcoin price repeats pattern of 2022, analyst says

The Bitcoin price currently stands at $65.100 and, according to analyst rektcapital, is forming a pattern that closely resembles what happened in 2022. Back then, a similar setup ultimately led to a sharp decline. The analyst points to the monthly chart and draws a direct comparison with the situation four years ago.

Bitcoin is available at OKX and Bybit.

In brief:

• Bitcoin is forming lower highs relative to the July peak, similar to the pattern in August 2022.
• In 2022, Bitcoin subsequently tested the 50-month EMA (purple line) and declined further.
• Rektcapital states that the current technical setup resembles the same situation.

Lower highs after the July peak

On the monthly chart, it can be seen that Bitcoin formed an upward wick in July, but has been setting lower highs since then. That is a sign that buyers are returning less forcefully after each upward attempt. Rektcapital points out that this pattern was actually different in August 2022: back then, Bitcoin managed to set a higher high in August relative to the July peak of that year.

Nevertheless, it still went wrong afterwards in 2022. Despite that higher high, Bitcoin technically positioned itself for a bearish retest of the 50-month EMA, the purple line on the chart. That retest ultimately led to a further decline towards the bottom of the bear market.

The same technical setup as four years ago

Rektcapital states that the current situation technically amounts to the same thing, regardless of whether Bitcoin is forming lower or higher highs. The price is currently close to the 50-month EMA and appears to be preparing for a similar retest. Whether that retest leads to a rejection and further decline, as in 2022, is not yet certain, but the setup certainly points in that direction.

Earlier, we already wrote that Bitcoin is declining less deeply than before, but the bear market is not over yet. The on-chain data also shows that Bitcoin is still far removed from the historic bottom zone. The comparison with 2022 adds an extra technical argument for investors keeping an eye on the medium term.