The 2022 Bitcoin crash was historic, with the price rising from $69,000 to $16,000 before bottoming out. Being the most recent bear market before the current cycle, many comparisons have been made between the current trend and previous trends. So far, Bitcoin prices are trying to survive the bear market, but there are similarities with the 2022 bear market cycle, and such a crash could be repeated.
Similarities that suggest Bitcoin prices could plummet further
A pseudonymous cryptocurrency analyst who goes by the name Sherlock on The first of these was the weekly trend line break that occurred after the initial wave of decline. Once this was breached, the floodgates opened for bears.
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Next on the list is Bitcoin recording multiple red candlesticks on a weekly basis. A remedial bounce then occurred that led to a consolidation in the middle of this trend, as demonstrated by the most recent rally towards $74,000. This green candle pushed the price towards the next resistance level. However, the bulls were ultimately rejected from this level and impulsively broke below the trend low.
The last event that happened on the chart was the formation of a top candlestick. Once this was done and the price was rejected from this level, the next breakdown saw the Bitcoin price crash from $30,000 to $17,500, followed by the next moderation, a 40% price decline.
Currently, all that remains for Bitcoin price is the completion of the upper candlestick. Sherlock confirms that the digital asset is actually printing the top wick candle. Once this is complete, a collapse similar to the one seen in 2022 could occur.
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A repeat of this 40% decline from current levels would send Bitcoin price back into the $35,000 area. Continuing to follow the bear market until the bottom is finally established will mean a drop to $30,000 before the sellers are exhausted.
But interestingly, this was the final drop leading to the end of the bear market in 2022. There was a rapid recovery in the months that followed, and the year after hitting its bottom, Bitcoin prices continued to hit new all-time highs.
Featured image from Dall.E, chart from TradingView.com
