Crypto Winter 2.0? Charts mirror 2021, but momentum is weak.

The next few weeks could determine whether Bitcoin can regain lost support or slide into a deeper correction.

Bitcoin (BTC) is repeating a dangerous technical pattern seen at the end of 2021, according to a detailed analysis by market analyst Material Indicators.

The chart structure, characterized by range tightening and failure of key support levels, suggests that the coming weeks will be crucial in determining the next major price trend. If this pattern continues, the analyst says it could lead to a long-term price decline similar to what happened in the crypto winter of 2022.

Fractal is talking to traders

In their technical breakdown, Material Indicators highlighted that Bitcoin's current weekly price action bears an uncanny resemblance to the structure prior to the 2022 bear market.

“Bitcoin is trading similar to what we saw in the previous cycle, and we are approaching the part where the trend was decided last time,” he said.

The price is trading parallel between the 100-week and 50-week simple moving average (SMA), indicating the last consolidation before the last major decline.

However, a critical difference makes the current setup more vulnerable. In the current cycle, BTC has lost support from the 50-week SMA, and the weekly Relative Strength Index (RSI) has broken below the key level of 41.

“It shows weaker underlying pressure than the corresponding level in the previous cycle,” Material Indicators said. According to them, the most immediate threat is the death cross on the weekly chart, where the 21-week SMA is estimated to be only two weeks away from crossing below the 50-week SMA, an event that would confirm that it has turned into a macro bearish rather than marking a historical bottom.

They believe that the final test will be Bitcoin's ability to find a convincing recovery and the 50-week SMA as support. In their opinion, not doing so would greatly increase the depth of the correction process.

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In their opinion, the biggest obstacle to any rally is the significant sell-side liquidity piled up around $100,000, which could trigger any breakout move.

“The next two to three weeks are critical,” the analysis concluded. “BTC will make a compelling recovery…or the macro trend risks becoming more bearish.

A market where opportunities vary

As of December 30, Bitcoin is trading at around $87,400, up nearly 3% over the past 24 hours and up more than 30% from its October trading high of $126,000.

Previously, the OG crypto briefly regained the $90,000 level, but analysts were quick to question its sustainability. Ali Martinez described the move as a possible “cat-cat dance,” pointing to a negative net capital outflow of more than $4.5 billion that “indicates that crypto is currently flowing out rather than flowing in.”

This migration is particularly visible in Bitcoin ETF products, which have seen consistent flows for months, shedding billions in assets under management. But despite the darkness around Bitcoin, other sectors of the market are attracting capital; In particular, investment products for XRP and Solana generated $1.14 billion and $1.34 billion in net income, respectively.