Bitcoin The evolution of prices gives us a feeling of déjà vu, and it is not the right one.
If you look at the price movements since the beginning of February, a very specific and worrying trend is forming that looks strikingly similar to the pattern we saw between November and January. This build ultimately paved the way for a crushing sale at nearly $60,000.
We are seeing what technical analysts often call a counter-trend rally – a modest rebound within a downtrend.
Here is the graph. Discover the two yellow chains.
The first yellow channel, on the left, shows the price movement from November 20 to January 20. At the time, bitcoin was trading in a tight range, with a slight upward tilt after a $100,000 decline. It looked like the price was recovering, but in reality it was just a pause – or small bounce – within a broader downtrend.
The result was that the price eventually dropped below the bottom of this trading range. Essentially, the level that traders considered a “floor,” or support, gave way and bitcoin plunged in a straight line from around $90,000 to nearly $60,000 on February 6.
Now look at the second channel on the right.
Since hitting these lows in early February, Bitcoin has once again been trading in a tight range with an upward tilt, perfectly contained between these two trendlines.
The similarity with the previous model is undeniable. The current relief recovery lacks the explosive momentum, much like the November-January model. It’s a slow, choppy climb. In technical analysis theory, this is a sign of bull exhaustion, with the market simply stopping to catch its breath before the bears recharge their engines.
And then?
Charts are not a holy grail and past performance does not guarantee future results. Yet traders use them to read market psychology, and right now they tell the story of a “buying the dip” crowd that lacks strength and conviction.
If Bitcoin falls below the lower trendline of its current channel, around $65,800, it could signal a return to bearish control.
The takeaway is that Bitcoin is at a major decision point. The bear market could deepen, as some predict, if prices fall below the channel formation. If it breaks out above the channel, the downtrend could run out of steam and the bulls could then make a strong comeback.
