Bitcoin Correction Echoes Past Cycles as Relief Rally Hopes Rise

Bitcoin’s (BTC) latest major price slump is drawing comparisons to past market cycles, with analysts pointing to a roughly 52% decline from recent highs—a level historically associated with mid-cycle corrections rather than full trend reversals.

A chart published on February 6 by professional trader TehThomas has gained traction among market participants for highlighting structural similarities between the current correction and Bitcoin’s 2021 mid-term bear phase.

The analysis suggests that while volatility remains elevated, the broader market context may reflect cyclical positioning rather than widespread capitulation.

Market Structure Echoes Previous Cycle Behavior

Bitcoin has repeatedly exhibited cyclical price behavior, with deep corrections often serving as a foundation for subsequent expansions. During the previous bull market, the asset retraced about 52% before stabilizing and eventually resuming its upward trajectory.

The current pullback from the 2025 all-time high appears to closely mirror that structure, reinforcing the view among some traders that the market is undergoing a structurally healthy retracement.

Although historical comparisons do not guarantee identical outcomes, recurring patterns remain a core component of technical market analysis.

Focus Turns to Potential Relief Rally

Market attention is increasingly shifting toward the possibility of a relief rally following the sharp decline. In the previous cycle, Bitcoin rebounded roughly 46% after establishing a mid-term low, a move that helped rebalance liquidity before the next phase of price action unfolded.

If a similar rebound were to develop now, traders suggest Bitcoin could move toward a Daily Fair Value Gap (FVG) created during the recent selloff. Fair Value Gaps are commonly viewed by technical analysts as areas where price may return to rebalance order flow after rapid directional moves.

Such a recovery would align with classic crypto-cycle behavior, in which strong rebounds often follow capitulation-style declines.

The Daily FVG above current price levels is emerging as a focal point for traders monitoring short-term momentum. These imbalance zones are frequently revisited as markets seek equilibrium after periods of aggressive buying or selling.

Acceptance above the gap could indicate strengthening bullish momentum, while rejection may reinforce the narrative that Bitcoin remains within a broader corrective phase.

Analysts stress that how price behaves inside this region could shape sentiment across derivatives and spot markets in the coming weeks.

Downside Risk Still in Play Despite Structural Support

Despite growing discussion around a potential rebound, traders caution that mid-cycle corrections rarely resolve in a single move.

Historical patterns indicate that Bitcoin often forms complex consolidation structures, characterized by alternating rallies and pullbacks before establishing a definitive bottom.

Within this framework, a rejection from overhead resistance could expose lower-liquidity zones, with some technical indicators identifying the $34,000 area as a possible higher-timeframe accumulation region.

Such a sequence—capitulation, a relief rally, followed by a secondary decline—has appeared in prior market cycles and is often viewed as characteristic of mid-cycle bear markets rather than full macroeconomic reversals.

For now, the 52% correction level is being watched as a potential inflection point. While analysts remain cautious about predicting immediate upside, the historical symmetry highlighted in recent chart analyses reinforces the view that Bitcoin’s long-term cycle structure may remain intact.

As volatility persists, traders are likely to monitor liquidity zones and imbalance levels closely, with relief rallies and sharp pullbacks both remaining plausible scenarios in the near term.

More Must-Reads:

• Bitcoin Structure Suggests Four-Year Cycle Still Has Room
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• 3 Things That Need to Happen for Bitcoin to Bounce Back

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