Bitcoin, the leading cryptocurrency, has recently experienced intense volatility, especially following its record-breaking price of $109,356 on January 20, 2025. Just weeks afterward, the cryptocurrency faced substantial declines, slipping to $91,530 by February 3. Despite this initial downturn, Bitcoin displayed strong signs of potential recovery with the formation of a considerable bullish engulfing candlestick, indicating trader interest and market resilience.
Since the mid-February peak, Bitcoin has entered a period of unusual stability, trading within a narrow horizontal range, which has important ramifications for its future price direction. Analysts are evaluating these patterns closely to predict whether Bitcoin can maintain momentum or if it’s on the verge of another downturn.
A recent analysis revealed the formation of a double-top pattern visible on the weekly time frame charts for Bitcoin, marking December 2024 and January 2025. This technical indicator is typically associated with bearish trends and seems to coincide with the cryptocurrency's peak price. Despite the alarming pattern, Bitcoin's price lagged near $95,000 over the last three weeks, raising the question: Can it defy the bearish signals and produce upward momentum once more?
If it does bounce back from the current level, there’s potential for Bitcoin to invalidate the negative pattern and reach new heights. Yet, important technical indicators hint at comparable bearish signals reminiscent of the situation before the sharp market corrections of 2021 and 2022. Specifically, the Relative Strength Index (RSI) has generated bearish divergence, and the Moving Average Convergence/Divergence (MACD) has also shown troubling signs. Together, these indicators suggest the possibility of the Bitcoin market nearing the conclusion of its current upward phase.
On the daily charts, the bearish sentiment appears stronger as Bitcoin's price struggles under the pressure of descending resistance trends observed since its peak. Notably, on February 21, Bitcoin faced rejection from this trend line and generated another bearish engulfing candlestick—an ominous sign for investors. Compounding the problem, Bitcoin's price is sitting below the midline range, estimated between $92,500 and $106,500, with the RSI hovering below 50 and the MACD failing to rise above the neutral level.
Given the ensemble of signals from both the daily and weekly time frames, the sentiment leans bearish, with analysts predicting potential declines if Bitcoin fails to recover. If the price were to collapse below $92,500, it could solidify this bearish outlook, confirming predictions of significant retracement.
Looking at the broader patterns, Bitcoin is currently within what is indicated as the fifth and final wave of its upward movement, marked as green on the charts and positioned from December 2025. The intricacies of this wave count, derived from complex technical analysis, leave the potential for upward movement ambiguous. While earlier waves occurred with considerable price increases, this fifth wave has either already ended or has the potential to extend beyond current levels, potentially aiming for $142,000.
The calculations identifying potential extensions reveal Bitcoin may still have room to rise significantly, but it requires maintaining levels above the recent low of $91,231 to stay within bullish territory. Should the price slide beneath this threshold, it will raise flags across the trading community, marking the end of the current market phase and forecasting significant declines below the $90,000 line.
Currently, Bitcoin’s price wavers after its historic high reached just weeks ago. The prevailing sentiment appears bearish, though the wave count analysis offers flickers of hope for continued ascent. The next few weeks will prove pivotal; Bitcoin's stability hinges on whether it can remain above $91,231, as failure to do so could signify the conclusion of its latest bullish market phase.