Bitcoin Technical Signals Suggest Potential Drawdown Ahead as Key Support Level Breaks

Recent market developments suggest that Bitcoin may be entering a critical phase. According to analysis from PANews, Bitcoin has once again closed below its 100-week simple moving average (SMA)—a technical indicator that has historically marked a major turning point for the world’s largest cryptocurrency. When this happens, the patterns of the past decade strongly suggest notable price pressure could follow in the coming weeks.

How the 100-Week SMA Functions as a Critical Support Level

The 100-week simple moving average has been functioning as a macro support level since at least 2015. This technical threshold has consistently proven important because whenever Bitcoin has dipped below it, the cryptocurrency has typically encountered significant difficulty recovering quickly. Instead, historical data suggests that the price has generally continued declining toward the 200-week SMA. The distance between these two moving averages often becomes the zone where substantial corrections occur, typically ranging from 45% to 58% over approximately 30 to 50 days.

Historical Correction Patterns When Bitcoin Breaks Key Levels

Looking at past cycles reveals compelling evidence of recurring patterns. In December 2014, after Bitcoin fell below the 100-week SMA, the price experienced a 55% decline over roughly 35 days before reaching the 200-week level. The November 2018 episode showed a similar script: following a weekly close beneath the 100-week SMA, Bitcoin dropped 45% in approximately 28 days.

The 2020 pandemic crash provided perhaps the most dramatic example—Bitcoin plummeted from the 100-week to the 200-week SMA in just seven days, recording a 47% correction. More recently, May 2022 demonstrated the pattern’s persistence, with Bitcoin’s price decreasing by 58% over around 49 days after breaching the critical support level. These historical instances strongly suggest that technical breakdowns of this magnitude have repeatedly triggered significant downward movements.

Current Market Status and Price Target Implications

In recent weeks, Bitcoin has once again closed below the 100-week SMA, which technical analysts suggest could trigger a repeat of historical patterns. If the historical precedent holds, a correction of approximately 50% would align with the observed range. Such a move would suggest price targets between $56,000 and $50,000, with the timeline potentially unfolding between March and April. While past performance never guarantees future results, the consistency of these patterns across multiple market cycles does suggest traders should remain vigilant during this technical juncture.