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Bitcoin investors are questioning whether the recent correction is over as BTC price trades around $82,000.
According to crypto analyst Rekt Capital, the recent pullback fits well within historical patterns and shouldn’t alarm investors.
Looking into previous cycles, Rekt Capital points out that Bitcoin has experienced several corrections of similar magnitude during its current bull run.
BTC Price Historical Pullback Patterns Suggest Predictable Cycle
Rekt Capital’s analysis compares the current market cycle and previous Bitcoin bull runs in 2017 and 2021. During the 2017 bull market, Bitcoin experienced multiple drawdowns. This includes pullbacks of 34%, 38%, 40%, and 30%, with the shallowest correction of 30%.
Similarly, the 2021 bull market featured a 31% pullback followed by a much deeper 55% correction before concluding with a 25% drawdown that preceded the final rally to new all-time highs.
This pattern of varying correction depths throughout market cycles appears to be repeating in the current bull run.
“In 2017 we’ve seen actually deeper pullbacks than 30 percent,” Rekt Capital explains, noting a clear “tendency of these pullbacks getting deeper as the cycle matured.”
However, he also points out that in both 2017 and 2021, “the final pullback in the bull run… is actually going to be quicker, it’s going to be shallower, and it’s going to enable the final run up to a bull market peak.”
Rekt Capital suggests that the current 30% drawdown likely corresponds to the middle-stage corrections seen in previous bull markets, rather than signaling the end of the uptrend or the final shakeout.
Bitcoin Indicators Point to Seller Exhaustion
Bitcoin’s recent price action has pushed the Relative Strength Index (RSI) into oversold territory. This is a condition that has historically preceded major bounces.
Rekt Capital highlights that when Bitcoin’s RSI drops below 30, it typically signals “a zone of overselling” where “sellers get a little bit too enthusiastic” and eventually become exhausted.
Rekt mentioned that a particularly bullish signal has formed on the RSI chart. He explains that this pattern has accurately marked bottoms throughout Bitcoin’s history, including the 2022 bear market low.
The current market structure also mirrors previous “reaccumulation ranges” seen earlier in this cycle. Bitcoin experienced a downside deviation” from its trading range, similar to the post-halving period when prices temporarily broke below support before recovering.
Recovery Path Requires Key Level Reclamation
For Bitcoin to confirm that the correction has ended and resume its upward trajectory, Rekt Capital identifies several technical milestones that need to be achieved. The primary objective is for BTC price to reclaim the lower boundary of its recent trading range around $93,500.
“Going forward, it’s going to be really important for Bitcoin to try and get as close as possible to $93.5K to try and reclaim this range and resynchronize with this overall reaccumulation range,” the analyst explains. This level is a key threshold that would confirm buyers have regained control of the market.
The current price action shows BTC price is attempting to form a base at the bottom of its downside deviation. It’s a process Rekt Capital describes as “clustering.” This pattern usually involves multiple weeks of price consolidation before a meaningful recovery can begin.
The overall technical setup suggests that while Bitcoin may have found its correction low, the path back to all-time highs will likely require patience.
