Bitcoin ($BTC ) has sharply fallen below the monthly EMA20, a level that historically carries major significance โ ๏ธ
In past cycles, when price lost this monthly support, it often led to deep corrections of 40โ50% from the EMA20 line.
Letโs look at the historical examples ๐
๐ HISTORICAL EMA20 BREAKDOWNS
๐๏ธ November 2018
BTC dropped from around $6,400 โ $3,300
๐๏ธ March 2020
BTC fell from over $8,000 โ $3,300
๐๏ธ April 2022
BTC declined from about $45,000 โ $15,000
Now, in January 2026, BTC has already fallen from roughly $96,000 โ $77,000 ๐
Using a conservative estimate of a 40% correction, price could still revisit the $50,000+ zone ๐ฏ
๐ชโฌ๏ธ GOLDโS DROP DIDNโT SAVE BTC
Many believe Bitcoin is โdigital goldโ ๐ง
Under that assumption, BTC should be negatively correlated with gold.
However, in the recent gold price collapse, BTC didnโt benefit at all โ
Instead:
Gold fell ๐
BTC fell even harder ๐๐
Positive expectations failed to materialize and turned into negative pressure instead.
This suggests the market may currently view BTC as less reliable and more prone to selling during stress โ๏ธ
โ SOโฆ IS BTC ENTERING A FULL BEAR MARKET?
Is Bitcoin doomed?
Not necessarily โ
There are still important counterarguments worth considering ๐
๐ 1๏ธโฃ REVERSE CANDLESTICK INTERPRETATION
On the monthly chart, BTC has now fallen for four consecutive months, totaling nearly a 40% decline ๐
Historically:
Aside from 2018, it is extremely rare to see five straight monthly red candles
When it does happen, price is often near the bottom, not the start of a deeper crash ๐งฑ
This behavior currently looks more like a major correction, not a total breakdown ๐ ๏ธ
๐ฆ๐ฑ 2๏ธโฃ SHORT-TERM PANIC AFTER THE FED APPOINTMENT
The recent crash in gold appears tied to market panic following the appointment of Kevin Warsh as Federal Reserve chairman ๐ฃ
Markets often overreact to policy changes in the short term ๐จ
But panic fades.
In fact:
Multiple institutions have reaffirmed that the long-term case for gold remains intact ๐ช
A strong rebound in gold could occur ๐
If that happens, BTC may find room for a reversal as well ๐
๐ 3๏ธโฃ THE 2021 PRECEDENT: A 50% DROP, THEN NEW HIGHS
History reminds us not to underestimate Bitcoinโs ability to surprise ๐ฅ
In April 2021, BTC topped out and then:
Dropped nearly 50% ๐
Later rebounded to a new all-time high by October 2021 ๐
That kind of rebound was unprecedented at the time โ yet it happened.
Because of that, an extreme rebound scenario cannot be ruled out, even now ๐ง
๐ง FINAL THOUGHTS
BTC losing the monthly EMA20 is serious โ ๏ธ
Gold failing to support BTC adds pressure ๐ฌ
But:
Structural bottoms often form during maximum doubt ๐ป
Prolonged corrections can still resolve bullishly ๐
History shows BTC has recovered from worse setups ๐
๐ Whether BTC revisits $50K or begins building a base, calling the cycle โoverโ may still be premature.
Sometimes the marketโs most uncomfortable phases are simply preparation for the next major move โณ
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