In his latest video published on December 21, the crypto analyst Rekt Capital tried to answer the question “What is the worst-case scenario for Bitcoin right now?”. After reaching a new all-time high at $108,374 on December 17, BTC price is down more than -11%.
How low can the price of Bitcoin go?
Rekt Capital sent Bitcoin withdraw price in historical perspective, underlines the historical importance of weeks 6, 7, and 8 in “seeking price increases.” Drawing on past cycles such as 2013, 2016–2017, and 2021, he explained that Bitcoin has a strong tendency to correct during these specific windows, with some dips reaching as turn to 34% or even higher.
“Understanding these weeks is critical because they tend to be difficult for Bitcoin,” Rekt Capital said, referring to past cycles where significant declines occurred within this period. For example, in week 7 of the 2013 cycle, Bitcoin experienced an incredible 75% pullback over 13 weeks. Similarly, the 2016-2017 period saw a 34% decline in week 8, underscoring the recurrence vulnerability in those particular weeks.
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As of now, Bitcoin has gone through a 10%+ level, bringing its price to a historically important support area at $96,537 on the weekly chart. Rekt Capital emphasized the importance of this support level, noting, “This historical support area has allowed it to move to $108,000.” He warned that failure to hold this support could lead to a sharper correction down to $89,830.
Analyzing the price action of the past few days, Rekt Capital highlighted the appearance of a bearish engulfing candle in the weekly chart – a technical indicator often associated with a reversal. “We are losing resistance that turned into support,” he said. This loss signals a possible move into a correction period, as the price struggles until the to maintain an upward path.
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Rekt Capital also highlighted the importance of maintaining the 5-week technical line in its analysis. “If we lose this 5-week technical uptrend and the orange trend line, it would be strong evidence that we could be moving into a correction period,” he warned.
In addition, he spoke to the CME gap between the price levels of $78,000 and $80,000, a critical area that is not filled. “Going into 26%, 27%, a 28% drop could fill the entire CME gap,” said Rekt Capital.
Historically, CME gaps tend to be filled but there are several that have never been filled.
Despite all the warning signs, Rekt Capital maintains a long-term supportive stance “It is these obstacles that will enable a future increase in the parabolic phase of the cycle,” explained e. Drawing from previous rounds, he showed how corrections have historically given the market the necessary “breathing”.
In the 2021 cycle, for example, Bitcoin experienced a 16% pullback in week 6 and an 8% drop in week 8, but the overall trend continued upwards. Similarly, the current 10%, although significant, could be a preparatory level for the the next step of price discovery.
At press time, BTC was trading at $95,000.
Featured image created by DALL.E, a chart from TradingView.com
