A rare and historically bearish weekly candlestick pattern has reappeared on Bitcoin’s chart, sparking warnings from analysts that the cryptocurrency could be headed for a significant correction. The pattern, identified by crypto analyst Sherlock on X, occurred when Bitcoin printed a red weekly candle that engulfed the prior week’s green candle and closed below the previous week’s low — a triple signal of aggressive selling pressure.
Last week, Bitcoin opened at $82,210, attempted a rally but was rejected, and ultimately closed at $77,457. This turned the prior week’s brief recovery into a classic bull trap. According to Sherlock’s analysis of Binance data going back to 2017, this exact setup has appeared 33 times. In 31 of those instances, Bitcoin traded at least 3% lower over the following 12 weeks, with 23 cases seeing declines of 10% or more. The average drawdown was 20.9%, and the median was 15.8%. Projecting from the $77,457 close, a median drop would send Bitcoin to around $65,000, while an average decline would drag it near $61,000.
The bearish technical signal comes amid broader market weakness. On-chain analytics firm CryptoQuant noted that demand across ETFs, futures, and spot markets is fading, while Swissblock observed that Bitcoin’s bullish momentum has faded, drawing parallels to the 2022 bear market. At the time of writing, Bitcoin was trading near $77,800, with bulls trying to defend the $77,000 level. The current weekly candle is still forming, with the potential to shift if sentiment improves. However, a four-day streak of ETF outflows continues to weigh on the market, reinforcing the cautious outlook.
