Bitcoin’s weekly SuperTrend indicator has flipped to a sell signal, confirmed by a close below the 50-week moving average. This technical setup, which previously preceded major drawdowns like those in 2018 and 2022, is raising concerns about a potential deep correction. Analysts suggest Bitcoin could face significant drops if historical patterns repeat.
A widely followed technical indicator on Bitcoin’s weekly chart has flipped to a sell signal, raising new warnings that the world’s largest cryptocurrency may be at the start of a deep correction, possibly one comparable in scale to the brutal declines seen in 2018 and 2022.
Last week, the SuperTrend indicator on Bitcoin’s weekly chart reversed and signaled “sell,” a move that was confirmed when BTC/USD posted a weekly close beneath the 50-week moving average, a benchmark many traders view as a dividing line between bull and bear regimes. Those two signals together have preceded the large drawdowns that followed previous bear markets, analysts say.
The indicator sits directly on the price chart, tracking Bitcoin’s overall trend much like moving averages do. By using the Average True Range (ATR) in its formula, it adapts to market volatility, making it a useful tool for traders to spot shifts in momentum and broader market direction.
According to Coin Telegraph website, past instances where both indicators aligned in the same way preceded major declines, with Bitcoin plunging roughly 84 percent in 2018 and 77 percent in 2022, according to historical chart data.
“The Weekly SuperTrend indicator has flipped red for the first time since January 2023 (end of the bear market),” said crypto analyst Bitcoinsensus.
If similar patterns play out again, Bitcoin could face a steep drop toward the $75,000 range, weighed down by weakening demand from corporate Bitcoin holders and ongoing outflows from US spot ETFs.
According to Cointelegraph, the Crypto Fear and Greed Index has plunged to 11, deep in “extreme fear” territory and its lowest reading since February, creating two potential paths for the BTC/USD pair in the weeks ahead.
In one scenario, Bitcoin may slide further before staging a strong rebound. A similar pattern unfolded in 2021, when the Fear & Greed Index swung between “extreme fear” and “fear” through May, June and July. During that stretch, BTC shed another 40 percent before reversing sharply and eventually climbing to a new all-time high of $69,000 by November that year.
“There’s a good chance that more immediate-term pain lies ahead, a reversal will likely hit in the next 2-3 weeks,” analyst Milk Road said, according to the Coin Telegraph website.
In the alternative scenario, Bitcoin could be transitioning into a true bear market. This mirrors what happened in May 2022, when the Fear & Greed Index sank into “extreme fear” and stayed there for an extended period, marking the beginning of the steepest leg of that year’s downturn.
During this stretch, Bitcoin endured the harshest phase of the 2022 bear market, plummeting from its prior all-time high of $69,000 to around $15,000.
