The Nightmare of 2022 Returns! A Deadly Death Cross Appears on the Bitcoin Chart

▲ Bitcoin (BTC) / ChatGPT-generated image ©

Bitcoin (BTC), which had rebounded to touch $70,000 amid strong earnings from Nvidia and market noise surrounding Jane Street, has turned downward again, emitting a strong signal of a potentially devastating halving crash reminiscent of the 2022 nightmare.

According to investment media outlet FXEmpire on February 26 (local time), a dead cross is imminent on Bitcoin’s three-day chart for the first time since 2022. This pattern, regarded by traditional traders as a powerful bearish signal, forms when the asset’s 50-period exponential moving average (EMA) crosses below the 200-period EMA. In 2022, shortly after this signal appeared, Bitcoin’s price plunged by nearly 50%.

A classic bearish pennant structure, a typical continuation pattern, is further amplifying the risk of additional selling pressure this year. Analysts warn that if the fractal pattern seen in previous bearish flag formations repeats, Bitcoin could fall another 50% from current levels, potentially dropping to the $30,000–$35,000 range by year-end.

The recent surge to $70,000 followed by a sharp slide is also being interpreted as a typical bear trap. Some speculate that Bitcoin’s more than 50% recent decline was driven by pressure from quantitative trading firm Jane Street and expect prices to recover once that pressure eases, but this remains an entirely unverified hypothesis. Market observers caution against mistaking temporary spikes caused by short covering for a genuine trend reversal.

On-chain data likewise reflects investors’ anxiety. CryptoQuant’s short-term holder exchange inflow profit and loss metric has remained in negative territory since January 26, indicating that investors who recently purchased Bitcoin are continuously sending their holdings to exchanges at a loss.

Ultimately, Bitcoin’s intermittent price rebounds appear to be not true reversals into an upward trend but rather urgent exit opportunities for fear-stricken investors. Until this on-chain indicator firmly turns positive and provides strong evidence that panic selling has transformed into genuine demand, the market is likely to endure intense downward pressure akin to walking on thin ice.

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