In his latest video published on December 21, cryptocurrency analyst Rekt Capital tried to answer the question “What is the worst-case scenario for Bitcoin right now?” After reaching a fresh record high of $108,374 on December 17, the BTC price dropped by over -11%.

How low can the price of Bitcoin go?

Rekt Capital placed Bitcoin’s price decline in historical perspective, highlighting the historical significance of weeks 6, 7, and 8 in the “price discovery uptrend.” Based on previous cycles such as 2013, 2016-2017, and 2021, he explained that Bitcoin has a powerful tendency to correct during these specific windows, with some declines reaching as much as 34% or even more.

“Understanding these weeks is key as they are typically problematic for Bitcoin,” Rekt Capital said, referring to previous cycles where significant declines occurred during this time frame. For example, in week 7 of the 2013 cycle, Bitcoin experienced a dramatic decline of 75% in 13 weeks. Similarly, in 2016–2017, there was a 34% decline in week 8, highlighting the recurring vulnerability in these particular weeks.

Bitcoin has undergone a retracement of over 10% in the current cycle, bringing its price down to the historically critical support zone of $96,537 on the weekly chart. Rekt Capital emphasized the importance of this level of support, noting, “This area of ​​historical support has enabled the move to $108,000.” He warned that failure to maintain this support could result in a more severe correction to $89,830.

Analyzing the price action over the last few days, Rekt Capital noticed the appearance of a bearish candle on the weekly time horizon – a technical indicator often associated with a potential reversal. “We are losing resistance that turned into support,” he noted. This loss signals a potential move into a correction period as the price tries to maintain its upward trajectory.

In its analysis, Rekt Capital also noted the importance of maintaining the 5-week technical line. “If we lose this 5-week technical uptrend and the orange trend line, it will be more and more evidence that we may be entering a corrective period,” he warned.

He further addressed the gap on the CME between the $78,000 and $80,000 price levels, a critical area that remained unfilled. “Going deeper into the 26%, 27% and 28% declines could close the entire CME gap,” Rekt Capital noted.

Historically, CME gaps tend to fill, while there are some that have never been filled.
Despite all the warning signs, Rekt Capital remains bullish in the long term. “These pullbacks enable future uptrends in the parabolic phase of the cycle,” he explained. Drawing from previous cycles, he illustrated how corrections have historically provided the market with necessary breathing space.

For example, in the 2021 cycle, Bitcoin experienced a 16% decline in week 6 and an 8% decline in week 8, but the overall upward trend continued. Similarly, the current 10% repeal, while significant, may serve as a preparatory phase for the next stage of price discovery.

At the time of publication, the BTC price was $95,000.

Featured image created with DALL.E, chart from TradingView.com