In a recent video published on Dec. 21, cryptocurrency analyst Rekt Capital attempted to answer the question “What’s the worst-case scenario for Bitcoin right now?” After hitting an all-time high of $108,374 on Dec. 17, BTC price is down more than -11%.
How low can the price of Bitcoin go?
Rekt Capital puts Bitcoin price pullbacks into historical perspective, highlighting the historical importance of Weeks 6, 7, and 8 in the “uptrend of price discovery.” Drawing on past cycles such as 2013, 2016-2017, and 2021, he explains that Bitcoin has a strong tendency to correct during these specific windows, with some declines as high as 34% or more.
“It’s critical to understand these weeks as they tend to be problematic for Bitcoin,” Rekt Capital said, referring to past cycles where major downturns occurred within this time frame. For example, in week 7 of the 2013 cycle, Bitcoin experienced a massive 75% correction over a 13-week period. Similarly, week 8 during the 2016-2017 period saw a 34% drop, highlighting the recurring fragility of these specific weeks.
So far in the current cycle, Bitcoin has experienced a 10%+ retracement, bringing its price into a historically critical support area of $96,537 on the weekly chart. Rekt Capital highlighted the importance of this support level, noting that “this historical support area has taken the stock to $108,000.” He warned that failure to hold this support could trigger a more severe pullback to $89,830.
Bitcoin Price Analysis Weekly Chart | Source: X @rektcapital
While examining the price action over the past few days, Rekt Capital noted the emergence of a bearish engulfing candle on the weekly timeframe – a technical indicator often associated with a potential reversal. “We are losing resistance that turned into support,” he observed. Such losses suggest a possible transition to a corrective period as prices struggle to maintain their upward trajectory.
Rekt Capital also noted the importance of maintaining the 5-week technical line in his analysis. He warned: “If we lose this 5-week technical uptrend and the orange trend line, it will be more and more evidence that we may be transitioning into a correction.
Bitcoin weekly chart | Source: X @rektcapital
Additionally, he addressed the CME gap between the $78,000 and $80,000 price levels, a key area that has yet to be filled. “Drilling down to a 26%, 27%, 28% drop could fill the entire CME gap,” Rekt Capital noted.
Historically, CME gaps have a tendency to be filled, while some gaps are never filled.
Despite all the warning signs, Rekt Capital maintains a long-term bullish stance “These pullbacks allow for future uptrends in the parabolic phase of the cycle,” he explained. Drawing on previous cycles, he illustrated how pullbacks have historically provided the market with a necessary “breathing space.”
For example, in the 2021 cycle, Bitcoin fell 16% in week 6 and 8% in week 8, but the overall trend continued to rise. Similarly, the current 10% retracement, while significant, can serve as a preparatory stage for the next round of price discovery.
At press time, BTC is trading at $95,000.
