Bitcoin In Vulnerable Position As 2022 Setup Repeats –$54K Next?

While Bitcoin (BTC) trades at its lowest levels in months, some market watchers have warned that the leading crypto may be preparing for another major drop as it retests a critical technical area that has historically marked a turning point.

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Bitcoin Tags Key 200‑Week SMA After Four Years

After falling 15% over the past four days, Bitcoin is attempting to reclaim the $64,000 level as support. The flagship crypto had been trading between $64,000-$82,000 since the early February crash, holding above the upper half of the range for nearly two months.

However, this week’s broader volatility pushed BTC toward the range’s lower boundary for the first time in months, reaching a four-month low of $61,383 on Wednesday night.

Amid this performance, market observer Rekt Capital highlighted that the cryptocurrency had tagged the 200-week Simple Moving Average (SMA) for the first time in this bear cycle, which may signal that another correction is coming.

As he explained, deviation below this SMA has “historically been the key to building out a Bear Market bottom formation.” In June 2022, Bitcoin reached this level during its bear market correction, quickly losing it as support on the weekly timeframe.

Following the initial drop below the 200-week SMA, the leading crypto traded sideways, briefly retesting this level before continuing its descent to its late 2022 bear market bottom.

Now, BTC has reached this key SMA nearly four years later, suggesting a drop to new lows if the 2022 playbook repeats. The analyst noted that Bitcoin has been rejected from a critical area and has broken a key level, another similarity to past bear market corrections.

According to the post, BTC was rejected from the base of the Macro Triangle after failing to break past the $82,500 area, revisited the 50-Month EMA during the recent drop, and is currently breaking down from this EMA, a setup that has repeated each cycle before the market bottom.

BTC’s $60,000 Support About To Give In?

Rekt Capital pointed out that Bitcoin rallies from the $60,000 region have progressively weakened since 2024, signaling deteriorating support. While the price surged 113% from this area during the mid-2024 rally, the February 2026 retest only generated a 38% move.

Now, the cryptocurrency has bounced 4% so far, “but it’s very likely that the rebound from here will be even weaker,” the analyst stated, adding that the “$60,000 area will be completely lost as support over time.”

He also stated that during bear markets, Bitcoin tends to form multi-month price clusters, followed by new Macro Lower Highs before distributing from the clusters to reach new lows.

“The good news is there are 1-2 such clusters left in this Bitcoin Bear Market, with the Bear Market Bottom being the final cluster,” he concluded.

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Meanwhile, Ali Martinez affirmed that the recent breakdown from the $72,000 support has left Bitcoin “in a vulnerable position,” as it opens the door for a 25%-30% correction based on the MVRV Pricing Bands.

The analyst previously noted that Bitcoin has consistently bottomed between the 1.0 and 0.8 MVRV Pricing Bands over the past decade. Now, the next major area of support is between $54,000 and $50,000, where the 1.0 pricing band is located.

Featured Image from Unsplash.com, Chart from TradingView.com