Bitcoin’s Critical Support Breakdown: Understanding the Market’s Current Downturn

The Perfect Storm: Three Key Support Levels Shattered

Bitcoin is going through one of its most challenging periods in recent memory, and the numbers tell a sobering story. The world’s largest cryptocurrency has tumbled to $74,890, marking a troubling 15% decline year-to-date and extending 2025’s 6.3% loss into even darker territory. What makes this downturn particularly concerning isn’t just the price drop itself—it’s the fact that Bitcoin has fallen below three technical pillars that traders and analysts have relied upon for months. These aren’t just random price points on a chart; they’re the AVWAP (Anchored Volume Weighted Average Price) tied to Bitcoin’s fourth halving event, the AVWAP connected to its most recent all-time high, and the 50-week simple moving average (SMA50). When Bitcoin traded above these levels, they acted like safety nets, catching the price during falls and providing launch pads for recoveries. Now that Bitcoin has crashed through all three, those same safety nets have transformed into ceilings, potentially blocking upward movement and signaling that sellers have firmly taken control of the market. This shift represents more than just a temporary setback—it’s a fundamental change in market structure that has seasoned investors paying close attention and newcomers wondering what went wrong with the cryptocurrency that seemed unstoppable just months ago.

Understanding the Technical Markers That Defined Bitcoin’s Journey

To truly grasp the significance of Bitcoin’s current situation, we need to understand what these three technical markers actually represent and why they matter so much. The AVWAP anchored to the Fourth Halving is essentially a volume-weighted average price calculated from the moment of Bitcoin’s fourth halving event—a programmed reduction in mining rewards that occurs roughly every four years and historically has preceded major bull markets. This marker reflects the average price investors have paid since that pivotal moment, weighted by trading volume, making it a psychological and economic reference point. The AVWAP anchored to the all-time high serves a similar purpose but starts from Bitcoin’s peak price, showing where recent buyers who purchased near the top are positioned. Finally, the 50-week simple moving average smooths out price action over nearly a year, filtering out short-term noise to reveal the underlying trend. According to analysis from Onchain, a respected CryptoQuant analyst, these three tools worked in concert from mid-2024 onward, creating a framework that helped traders understand Bitcoin’s movements. Between May and August 2024, Bitcoin’s price moved within a defined range, bouncing between the upper and lower boundaries of the Fourth Halving AVWAP while consistently closing above the SMA50, which maintained an upward slope—a sign of healthy bullish momentum. During this consolidation phase, Bitcoin tested highs around $71,958 and $70,000 while finding reliable support around $57,000, establishing a pattern of higher lows that suggested accumulation and strength beneath the surface.

The Epic Rally and Warning Signs at Market Tops

September 2024 marked the beginning of what would become an extraordinary rally that captured global attention and brought Bitcoin back into mainstream financial conversations. From a starting point of $54,000, Bitcoin embarked on a powerful ascent that would eventually carry it to $108,000 by December 2024—a move that doubled the cryptocurrency’s value in just three months. As the price climbed higher, the AVWAP bands expanded outward, a natural response to increased volatility and the distance between current prices and the average. What’s particularly interesting is that the upper band of the Fourth Halving AVWAP didn’t just track Bitcoin’s rise—it actually predicted major resistance levels with remarkable accuracy. Onchain’s analysis revealed that Bitcoin repeatedly bumped its head against this upper boundary, touching approximately $109,000 in January 2025, then $112,000 in May 2025, followed by $124,000 in August 2025, before finally printing an all-time high of $126,000 in October 2025. Each of these levels aligned almost perfectly with the AVWAP’s upper boundary, creating a pattern of repeated market tops that, in hindsight, were flashing warning signs that Bitcoin was becoming overextended. Throughout this rally phase, the original Fourth Halving AVWAP and the SMA50 continued performing their supporting roles, catching the price during brief pullbacks and giving bulls confidence that the uptrend remained intact. This period felt euphoric for Bitcoin holders, with each new high bringing predictions of $150,000, $200,000, or even higher targets from enthusiastic analysts and influencers.

The Breaking Point: When Support Becomes Resistance

The turning point came after Bitcoin’s January 2025 peak of $109,000, when the cryptocurrency experienced its first serious test of the support zone that had held firm for months. As Bitcoin dropped sharply to $74,000 by April 2025, buyers initially stepped in to defend the AVWAP and SMA50 region, demonstrating that confidence hadn’t completely evaporated. However, after reaching the all-time high of $126,000 in October 2025, something fundamental shifted in market dynamics. The trend that had carried Bitcoin higher for over a year began showing signs of exhaustion and weakness. Mid-November 2025 brought a significant development: Bitcoin closed a weekly candle at $94,000, marking the first time it had moved decisively below the SMA50—a breach of what had been a reliable support level throughout the entire bull run. The decline didn’t stop there. As November turned to December 2025, Bitcoin slipped further into a trading range between $84,000 and $80,000, now relying solely on the Fourth Halving AVWAP as its last line of defense. A brief recovery attempt emerged, offering hope to bulls that the worst might be over, but the $97,000 to $100,000 zone—which had previously acted as support—had transformed into stubborn resistance. Bitcoin formed a lower high at $93,000, a technical pattern that confirmed momentum was weakening and that the market structure had shifted from bullish to bearish. This resistance cluster wasn’t just a single level but a convergence of multiple technical factors, including the UTXO Age Bands (showing where holders who bought six to twelve months ago are positioned), the declining SMA50, and the AVWAP anchored to the recent all-time high—creating a formidable ceiling that Bitcoin couldn’t break through despite multiple attempts.

The Current State: Sellers in Control

With Bitcoin now trading at $74,890, the technical picture has become increasingly clear, and it’s not encouraging for bulls hoping for a quick recovery. Onchain’s latest analysis points out that the price has closed decisively below all three critical markers: the Fourth Halving AVWAP at $85,257, the SMA50 at $100,415 (which has now started sloping downward—a bearish signal in itself), and the all-time high AVWAP at $97,616. This triple breakdown isn’t just a collection of random technical failures—it’s a systematic dismantling of the support structure that held Bitcoin aloft throughout its rally phase. When a market loses support at one key level, it can often be explained by temporary factors or short-term selling pressure. But when multiple independent technical indicators all fail simultaneously, it suggests something more fundamental: a transfer of control from buyers to sellers, from optimism to fear, from accumulation to distribution. The implications are significant for anyone holding Bitcoin or considering entering the market. Those three levels that once caught falling prices now act as overhead resistance, meaning any recovery attempts will likely face selling pressure from traders who bought higher and are now looking to exit near breakeven, from algorithmic trading systems programmed to sell at moving averages, and from institutional investors reassessing their risk exposure. The market psychology has shifted from “buy the dip” to “sell the rally,” and that mindset change can be self-reinforcing as more participants adjust their strategies to reflect the new bearish reality.

Broader Warnings and Historical Parallels

The technical breakdown in Bitcoin’s price structure hasn’t gone unnoticed by the broader analytical community, and several prominent voices are sounding alarms about what might come next. Rekt Capital, a well-respected technical analyst with a track record of identifying major market turning points, recently highlighted that Bitcoin produced a bearish monthly close below the base of a long-term Macro Triangle pattern—a significant development in longer-timeframe technical analysis. According to his assessment, the market now stands on the edge of a complete structural breakdown that could trigger the bearish phase of the current market cycle, potentially lasting months or even longer. Even more sobering is the analysis from Aralaz, another analyst who’s taken a historical approach to understanding Bitcoin’s current position. By examining previous cycle peaks and the crashes that followed them, he’s drawn parallels that suggest the current downturn might have considerably further to run. In 2017, Bitcoin peaked near $19,000 before suffering an 84.1% collapse through 2018, bottoming around $3,000. In 2021, Bitcoin topped at $69,000 before experiencing a 77.4% drop through 2022, finding a floor near $15,500. Based on these historical patterns, Aralaz suggests that the 2025 peak of $126,000 could potentially lead to a 72.2% downturn extending into 2026, which would put Bitcoin in the $32,000 region—a price level that seems almost unthinkable given current valuations but is consistent with how severely Bitcoin has corrected in previous bear markets. Whether these dire predictions come to pass remains to be seen, but they serve as important reminders that cryptocurrency markets are cyclical, that what goes up dramatically can come down just as dramatically, and that technical support levels matter precisely because they represent real psychological and economic zones where market participants make decisions about buying, selling, and holding.