TL;DR
- Bitcoin’s “market structure” increasingly resembles the pattern seen in the first quarter of 2022, prior to the bear market.
- On-chain data shows that most coins are “underwater,” creating a fragile capitulation balance.
- The rejection at the $93,000 resistance activates a “bear flag” with a technical target of $68,150.
The pioneering cryptocurrency, currently trading near $92,196, is showing signs of a deeper correction after its most recent recovery attempt stalled at the $93,000 level. In this context, recent on-chain analysis suggests that the current structure of Bitcoin is simulating the bearish Bitcoin patterns observed in the first quarter of 2022. Notably, that period preceded the start of the bear market.
Glassnode recently reported that Bitcoin dropped towards its True Market Mean (or Active-Investor Price), a level currently at $81,500. This level represents the cost basis of all non-dormant coins and often serves as the dividing line between a mildly bearish phase and a deep bear market.
Although the price has stabilized above this threshold, Glassnode warns that the structure resembles that of early 2022. Back then, when BTC dropped below this threshold on May 6, the price plunged 61%, bottoming out at $15,500 in November of that year.
Technical Analysis Confirms Bitcoin’s Bearish Patterns
The resemblance is confirmed by the Supply Quantiles Cost Basis model, which tracks the entry price of the largest coin clusters. Since mid-November, Bitcoin’s price has fallen below the 0.75 quantile (near $96,100), meaning that more than 25% of the supply is now “underwater.”
Glassnode describes this situation as a “highly fragile balance” between the capitulation of investors who bought at the top and the potential exhaustion of sellers. The sensitivity to macro shocks will only be reduced once the 0.85 quantile ($106.2K) is reclaimed as support.
Additionally, CryptoQuant’s Bull Score Index, a momentum indicator, fell below 40, moving deep into bearish conditions, similar to the levels observed in January 2022. From a technical perspective, Bitcoin’s rejection at the $93,000 resistance, which coincides with the yearly open, activated a “bear flag” on the two-day chart.
A break and close below the flag’s lower boundary at $91,000 would fully validate this bearish Bitcoin pattern, opening the door for a new downtrend toward the pattern’s measured target at $68,150.
In summary, this level, which corresponds to the previous all-time highs of 2021, would imply a total loss of 27% from the rejection point. Momentum indicators, such as the RSI, remain sluggish, favoring the continuation of the correction.
