- The Bitcoin price holds $62,200 support with the formation of a double bottom reversal pattern.
- Historical cycle data suggests prior bear phases lasted around 21–23 months from peak to bottom.
- A bullish divergence in daily Relative Strength Index 43% suggest a potential recovery in near term.
On Wednesday, the Bitcoin price experienced a strong inflow that raised its value to $69,000 mark, registering an intraday gain of 7.7%. The upswing followed a sudden risk-on sentiment in the broader market following President Trump’s February 24 State of the Union address. While the relief rally needs confirmation to signal trend reversal, the on-chain highlights more pain ahead before buyers could gain bottom support..
23 Months Since ATH Mirrors Past Market Bottoms
In the last five months, the Bitcoin price has recorded a significant downtrend from $126,272 to $69,533, registering a 45% loss. Consecutively, the asset market cap plunged to $1.37 Trillion.
A monthly chart analysis draws attention to patterns in earlier cycles in which declines from a peak to lows on the timeframe bars covered about 21 to 23 months. The current phase is now at about 23 months from the last high, which coincides with what trader Coinvo has noted that this duration marked cycle bottoms in previous instances without exception to date.
Separate technical indicators give context to the correction. Bitcoin’s Sharpe ratio which measures risk-adjusted performance has gone into deeply negative territory recently, with readings as low as -38 or around -11.6 in some analyses by platforms like Alphractal and others. Such compressed levels have occurred in late stage bear phases in the past, often when returns are lagging behind significantly compared to volatility.
Market observers point out that although the time passed corresponds to some historical precedents and the risk-reward parameter says that strong downside pressure is present, the price is still in a period of uncertainty in the context of wider factors in the economy.
Bitcoin Price Eyes $82,000 Jump with Double Bottom Reversal
For the past three weeks, the Bitcoin price has traded in a range from $73,000 to $62,200. Several swings within this range indicate lack of conviction from traders to sustain directional movement on either side.
However, a fresh relief rally in the broader crypto market, the Bitcoin price rebounded from $62,200 yesterday, to currently trade at $69,000. This upswing marks a second reversal from the aforementioned support in ongoing consolidation, revealing the formation of a classic reversal pattern called double bottom.
The chart setup is characterized by two bullish swing from a particular support, displaying a ‘W’ shaped recovery. If the pattern holds, the Bitcoin price should rise 7.2% and challenge the pattern’s neckline resistance at $73,000.
A higher low formation in momentum indicator RSI accentuates the surge in bottom buying pressure, reinforcing the asset’s potential for next breakout.
A bullish breakout from the pattern’s resistance trendline will accelerate the bullish momentum. With sustained buying, the post-breakout rally could push the asset to $81,530.
On the contrary, if sellers continued to defend the $73,000 resistance, the current consolidation would prolong.
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