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As the market erases its 2026 gains, Bitcoin (BTC) has fallen to its lowest level in weeks and is attempting to reclaim a crucial level. Some market observers have warned that a retest of the November lows is likely if volatility continues.
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Bitcoin Breaks Down From Key Support
On Wednesday, Bitcoin continued to pullback and hit a three-week low of $87,263. The cryptocurrency had been trading between the $90,000-$96,000 range since its start-of-the-year breakout, reaching a two-month high of $97,924 a week ago.
However, the crypto market has experienced significant volatility over the past few days, fueled by renewed geopolitical tensions. As a result, BTC has retraced 10% in the past week, falling to the mid-zone of its $84,000-$94,000 range.
Amid this performance, trader Wealthmanager noted that the flagship crypto had retraced all its 2026 gains, briefly falling below its yearly opening and POC. He added that this is a critical level to hold in the coming days, as losing this area could send the price back to the $80,000 mark.
Analyst Crypto Jelle highlighted a two-month bear flag structure on BTC’s daily chart, suggesting a high chance of a breakdown. “Lose the current lows again, and bears will be fully back in the driver’s seat,” he asserted.
Similarly, Market observer Lyvo Crypto pointed out the same formation, detailing that Bitcoin broke down from the pattern’s ascending support after the recent price action and lost its two-month uptrend.
To the trader, this signals that “momentum is fully in the bears’ control” and “if it [bearish momentum] sustains, we could see a free fall” that could likely result in a retest of the $78,000 area.
In the case of a breakdown to the November lows, he advised that “from there, we’ll wait for confirmation of a double bottom and look for a relief rally.”
BTC To Repeat Its 2020 Price Action?
Crypto Bullet drew a parallel between BTC’s current price action and its performance in early 2022. The analyst affirmed that the current price action closely mirrors its 2022 fractal, which could signal that a major correction is ahead.
At the time, Bitcoin retraced over 40% from its late 2021 cycle top, followed by a “dead cat bounce” at the start of 2022 and a second major correction toward new lows.
Now, the flagship crypto displays a similar performance as it has retraced 30% from the October highs and is currently attempting to reclaim the lost ground. However, Crypto Bullet noted that there are two significant differences from its 2022 correction.
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First, Bitcoin has yet to retest the 50-week and 200-week Moving Averages (MAs). Second, the timing hints that the final breakdown is not due until later in Q1.
“If we match the 2022 fractal’s top and the October 2025 top, we’ll see there’s still about 1 month of PA to make that final leg up and test the 50-Week MA or the 200-Day MA,” he explained.
He concluded that one more pump above the $100,000 is likely, but advised caution as the key supports are being tested.
As of this writing, Bitcoin is trading at $89,890, a 1.2% increase in the daily timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
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