Is Bitcoin Ready for Its First Bear Cycle Rally?

Bitcoin has been punished since hitting its October 6 all-time high, with 6 red weekly candles out of the last 7. The technical breakdown is clear: BTC has already broken below the 1W MA50 support and is now eyeing the 1W MA100 moving average.

The Numbers Tell a Story

Here’s what’s interesting—Bitcoin’s current correction sits at -32.30%, which matches almost perfectly with:

• January-April 2025 drawdown: -32.30%
• March-August 2024 pullback: -33.55%

This repetitive pattern suggests the 86,600-83,600 zone could act as a technical floor and potential bounce point for the first relief rally within this bear cycle.

The Oversold Signal

The weekly RSI is creeping toward 30 (oversold territory), which historically has preceded counter-trend bounces. If we see a rally materialize, technical levels to watch:

• Fib 0.618 retracement: Potential resistance target
• 1D MA100 (red trendline): Likely rejection point
• 1W MA50: Previous support, now resistance

The 1D MA200 has been the rejection zone in the last two bear cycles, and combined with the 0.618 Fib level, it forms a ceiling traders will be watching.

The Santa Rally Trap?

Timing-wise, any rebound could coincide with year-end stock market rallies. But here’s the risk: this bounce could turn into a textbook bull trap—luring retail back in before the downtrend resumes toward lower lows and eventually the 1W MA200 support.

Bottom line: Technical setup suggests a bounce is due, but don’t mistake relief for recovery.