Bitcoin’s Record Red Month May Be Setting Up A Reversal: Analysts

Reports note that similar multimonth selloffs in the past were sometimes followed by sudden, strong rebounds, but those outcomes were not automatic. Traders are watching support near recent lows while sentiment indicators show rising caution among both retail and institutional players.

Reports from Milk Road point to a striking example: after a long losing streak in 2018/19, the market produced large gains in the months that followed. That episode is often referenced by bulls who argue that compressed prices can set the stage for big percentage moves to the upside. Yet context matters. Market cycles are messy, and raw percentage comparisons skip over differences in liquidity, participant mix, and macro settings.

Weekly charts are shouting caution in some corners. Analyst Solana Sensei highlighted a run of red weekly candles that echoes parts of 2022, when extended selling drove BTC to the mid-$20,000s. At the same time, quarterly data from the 2022 drawdown shows losses can stack up for long stretches, and those patterns were painful for holders who expected quick turns.

Some analysts have argued that the current cycle looks different because the monthly RSI never saw the same overbought expansion that preceded some prior bear phases; their view suggests rebounds might not follow the old script.

Last time this happened was in 2018/19 when we saw 6 red months.

Silver lining: it led to a reversal w/ 316% returns over the following 5 months.

If history repeats – the reversal begins April 1st.

Based on reports and the mix of indicators, a rebound in March or April is possible, but it cannot be counted on. Some traders will prepare for a quick bounce; others will keep dry powder and wait for clearer confirmation.

Featured image from Pexels, chart from TradingView