Bitcoin at Risk? What the Chart Signals About a Possible Bear Market in 2026
The crypto market is going through an extremely delicate moment. And anyone who has already lived through a few down cycles knows that this type of move usually does not give a second warning. In Bitcoin’s first major bear market, in 2017, the drop came close to 80%. Then, between 2019 and 2020, the decline was around 70%. In the bearish cycle that began in 2021, Bitcoin fell roughly 75%.
Now, at the beginning of 2026, the market is once again building a move that could indeed trigger another bear market. That does not mean spreading fear irresponsibly. It means looking at the chart seriously and understanding what technical analysis is actually showing.
In this article, we will analyze Bitcoin with a main focus on the monthly, weekly, and daily charts, while also looking at Ethereum at the end, since it is also sending important signals about the current state of the crypto market.
Bitcoin’s Monthly Chart Has Already Sent a Very Serious Signal
On the monthly chart, Bitcoin had been in a classic uptrend structure, with higher highs and higher lows. But that structure was broken. Price violated the previous low on the monthly chart, and from a technical standpoint, that is an extremely serious signal.
When an asset loses a relevant low on a timeframe as important as the monthly chart, the most serious interpretation stops being “just a simple correction” and starts considering the possibility of a broader correction of the entire prior cycle. In this case, we are talking about the bull cycle that took Bitcoin from the $15,000 region to $120,000, a gain close to 700%.
On top of that, the monthly chart built a bearish divergence. Price kept making higher highs, but RSI started making lower highs. This kind of divergence often signals weakening trend strength, especially when it appears in very stretched regions.
From the all-time high to the moment the video was recorded, Bitcoin had already fallen nearly 50%. And technically, this could still be only the beginning.
The Retracement Targets Point to $56,000 and $44,000
When Fibonacci is projected over that entire bull cycle, the 38% retracement appears in the $56,000 region. And that level stands out not only because of the retracement itself, but also because it matches an important area from the past, creating a relevant technical confluence.
If that support does not hold, the next major point of attention becomes the 50% retracement of the entire cycle, around $44,000. That would imply a total decline of roughly 64% from the high.
At first glance, this may sound extreme to anyone who has not lived through previous cycles. But when you look at Bitcoin’s own history, there is nothing absurd about this reading. In previous bear markets, the asset dropped more than that. In other words, projecting $56,000 or even $44,000 is not pessimism. It is a realistic reading of the market’s historical and technical behavior.
Violent Rallies Also Happen During Bear Markets
This is a point many people ignore: a bear market is not a straight line downward. On the contrary. The strongest rallies often happen precisely inside bearish cycles.
After a very sharp drop, any bounce back to the 20-period moving average on the monthly chart can already represent a move of 20%, 30%, or even 40%. That is what fools so many people. The trader looks at that rally and thinks the worst is over, when in reality the market may just be breathing before continuing lower.
Bitcoin’s own past shows this clearly. In previous cycles, price fell around 50%, then rallied 40%, gave the impression of a recovery, and only afterward continued lower.
That is why the fact that the market can rally hard in the middle of this process does not invalidate the bear market thesis. On the contrary, it is part of the pattern.
The Weekly Chart Reinforces the Bearish Reading
On the weekly chart, Bitcoin made a first major leg down, corrected to the 38% retracement, and then broke the low. That detail matters because it shows that the weekly structure has also entered a downtrend.
In the short term, that opens room for Bitcoin to test the $60,000 region. But traders need to be careful with one detail: weekly RSI is already approaching oversold territory.
That does not automatically mean a bottom is in. It only means the market is very stretched in the short term and that corrective rallies can happen. And those rallies are exactly where many people get trapped, believing the main trend has already turned.
For now, the flow remains bearish. The market still shows seller control, and pessimism is already visible in participant behavior.
Trying to Catch a Falling Knife With Leverage Is a Recipe for Blowing Up
This is one of the most important warnings in the analysis.
A lot of people start buying in the middle of the decline because they think they have already found a “good price.” They bought at $90,000 because it had been $120,000. They bought at $80,000 because it looked cheap. They bought at $70,000 because it had fallen even more. And price kept collapsing.
Buying spot, without leverage, with a small portion of capital and a long-term mindset is one conversation. That can make sense within an accumulation strategy. But using leverage to try to pick the exact bottom in the middle of a downtrend is the perfect recipe for getting wiped out.
If Bitcoin still has room to seek $56,000 or even $44,000, anyone using leverage to catch the falling knife is going to be punished hard by the market.
The Daily Chart Shows Urgency on the Sell Side
On the daily chart, the bearish move has already exceeded important Fibonacci projections. When price blows past 161% of a bearish projection, that usually indicates strong downside urgency.
This kind of move often involves liquidations, panic, and people closing positions without thinking twice. And volume confirms it. Across several exchanges, volume appears to be rising during the decline, which is a terrible sign for anyone hoping for a quick return to the upside.
At the same time, daily RSI is already approaching oversold levels. That reinforces the idea that the market may need a breather. But if that breather comes, it does not automatically change the main trend. It simply creates a correction inside a broader bearish structure.
The logic remains the same: first the market may correct and cool off the indicators, and only then, if selling pressure remains, it can resume the decline.
And Ethereum? The Situation Also Calls for Caution
Ethereum is also showing a concerning structure.
On the monthly chart, the all-time high was close to $4,900, and since then the asset has never been able to sustain a recovery above that region. The decline from the top has already reached roughly 60%, with a very aggressive sequence of bearish monthly candles.
On the weekly chart, the projection first points to the $1,700 region. After that, the next relevant zone appears around $1,500.
Just like Bitcoin, Ethereum’s weekly RSI is also moving toward oversold territory. But oversold does not mean bottom. Ethereum’s own past shows that clearly. In previous cycles, the asset became oversold and still continued to fall much further afterward.
So using RSI as an excuse to start buying aggressively in the middle of the decline can be a serious mistake. The indicator only shows that the market is stretched. Not that it has finished falling.
Ethereum’s Daily Chart Will Be the First to Signal the Next Major Bounce
If Ethereum is going to enter a more meaningful correction within this broader decline, the warning will first come from the daily chart.
That is where traders need to watch for the formation of a bullish pivot, meaning a higher low followed by the break of a prior high. This type of structure can signal that the weekly chart is finally about to begin a corrective leg higher.
And if that correction comes, it can be strong. In bear markets, 20%, 30%, and even 40% rallies are completely possible.
But until that pivot actually appears, the most coherent stance is to keep respecting the main trend. For now, the flow remains bearish.
Day Traders Can Find Major Opportunities
If this moment requires caution for long-term investors, it also creates a different reality for day traders: volatility.
Markets in strong downtrends, especially in crypto, tend to offer very aggressive intraday moves. That means more opportunity for traders who know how to operate short-term, manage risk, and respect the dominant direction of the market.
The key, in this case, is not to try to call the exact bottom. It is to take advantage of the moves the market is offering inside the current flow.
Conclusion
The crypto market situation at the beginning of 2026 is serious. Bitcoin lost a relevant low on the monthly chart, built a bearish divergence, and opened technical room to seek regions such as $56,000 and even $44,000. Ethereum is also under pressure, with projections toward lower levels and no clear reversal signs on the higher timeframe.
That does not mean a straight-line collapse. On the contrary. Bear markets are usually accompanied by violent rallies, strong corrections, and traps for those who get fooled by temporary rebounds.
The central point of the analysis is simple: the main trend right now inspires much more caution than optimism. Anyone looking to accumulate for the long term needs to avoid leverage and think carefully about capital management. Day traders can take advantage of the volatility, as long as they respect the context.
And anyone trying to catch the real turn in the market needs to wait for the right signal: a clear bullish pivot on the daily chart, capable of signaling that the weekly chart has started correcting and that the market may finally be able to breathe before deciding its next major move.
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