Bitcoin Price Plummets: Critical 2021 Bull Market Retest Sparks Fears of $50,000 Bottom

Global cryptocurrency markets entered February 2026 under intense pressure, with Bitcoin (BTC) price action collapsing toward a critical retest of its 2021 bull market highs. This dramatic move has triggered widespread concern among analysts, many of whom now warn that the pioneer cryptocurrency could establish a new bear market bottom near $50,000. The current sell-off represents Bitcoin’s weakest performance in 16 months, compounding losses from a grim weekend trading session that saw BTC/USD reach levels not witnessed since November 2024.

Bitcoin Price Action Revisits 2021 Territory

Monday’s trading session delivered another blow to Bitcoin bulls as the cryptocurrency breached its April 2025 low. Consequently, BTC/USD established its weakest valuation since late 2024, according to TradingView data. This development has shifted market sentiment firmly bearish at both the weekly and monthly candle close. Trader Roman highlighted the precarious technical situation on social media platform X, stating, “76k is the last support before 50k area. Lots of volume on the drop which is further confirmation of bearish price action.” He explicitly confirmed the market’s bear phase and anticipates a move toward $50,000 or potentially lower.

Other prominent voices echoed this cautious outlook. Crypto trader and entrepreneur Michaël van de Poppe advised followers to monitor precious metals for a bottom signal before expecting relief in cryptocurrency markets. He noted the severe correction in silver, which fell over 40% in two days, and emphasized the historical correlation: “Remember, when commodities fall, crypto follows.” Meanwhile, analyst CrypNuevo suggested that any meaningful BTC price reversal would likely commence only after a successful retest of the 2021 all-time high region, a level markets are now approaching.

Technical Indicators Flash Oversold Signals

Despite the overwhelming bearish sentiment, several classic technical indicators suggest the market may be approaching an oversold extreme. The weekly Relative Strength Index (RSI), a momentum oscillator that measures the speed and change of price movements, currently sits at 32.2. This places it merely two points above the traditional “oversold” threshold of 30. Market observer Mags pointed out that Bitcoin’s weekly RSI hasn’t reached these levels since the conclusion of the 2022 bear market, potentially signaling a macro bottom formation.

On shorter time frames, the signal appears even more pronounced. The analytics account Frank A. Fetter noted that at the $76,000 price level, Bitcoin’s 1-day RSI is the most oversold it has been since BTC traded at $26,000. However, not all indicators suggest an immediate reversal. Analyst Titan of Crypto examined the monthly stochastic RSI, explaining that historically, when this metric settles below 20, it confirms a bear market’s start. “Price usually needs time to build a proper bottom,” he stated, urging caution against claims that the bottom is already established. He views the current movement as confirmation, not completion, of a bottoming process.

CME Gaps and On-Chain Demand Metrics

Attention has also focused on significant “gaps” in the CME Group’s Bitcoin futures market, located at $84,000 and $95,000. These gaps, areas where the price jumped with no trading activity, often attract price action to “fill” them. Andre Dragosch, Head of Research at Bitwise Europe, interpreted the large CME gap as evidence that the latest downward move might be a “fake out,” suggesting potential for a price rebound to close the gap. Conversely, on-chain data reveals worrying demand trends, particularly in the United States. The Coinbase Premium Index, which measures the price difference between Coinbase (US) and Binance (global) BTC pairs, has remained deeply negative since mid-December.

CryptoQuant analyst TeddyVision described this as a “structural vacuum” in U.S. spot demand. Unlike temporary negative premiums seen in early 2025, the current discounts are deeper and more persistent. “That’s not just selling – it’s U.S. spot demand staying on the sidelines,” the analysis concluded. A negative premium indicates Asian market demand is outpacing U.S. demand, making Wall Street trading hours a consistent source of selling pressure.

Macroeconomic Headwinds Intensify Market Pressure

The cryptocurrency sell-off is unfolding against a backdrop of broad financial market uncertainty. Precious metals experienced historic volatility, with gold dropping to $4,400 per ounce and erasing over 20% from its all-time high in just three days. Silver plunged more than 30%. Analytics firm Mosaic Asset Company linked this dramatic reversal directly to the nomination of Kevin Warsh as the new Federal Reserve Chair, which sparked concerns over a less accommodative monetary policy. “Those were the worst single-day declines since the early 1980s,” Mosaic reported regarding gold and silver.

This macro shift has propelled U.S. dollar strength, with the Dollar Index (DXY) rebounding from multi-year lows near 95.50. A strengthening dollar traditionally creates headwinds for risk-on assets like Bitcoin. Analyst Joey Keasberry suggested this could signal a “significant bottom” for the dollar and the beginning of a classic risk-off environment. Furthermore, some analysts propose that Bitcoin’s breakdown could be a leading indicator for broader financial market trouble. Mosaic Asset Company noted Bitcoin is forming a bearish head and shoulders pattern, warning, “The continued breakdown in Bitcoin could be sending a warning on financial market liquidity later in the year.”

The current U.S. corporate earnings season adds another layer of uncertainty, with major tech companies like Alphabet (Google) and Amazon scheduled to report. This follows disappointing market reactions to Intel and Microsoft earnings last week, despite both companies beating expectations. Trading resource The Kobeissi Letter summarized the mood, stating market uncertainty is now “elevated,” with key economic data on manufacturing, job openings, and unemployment claims due throughout the week.

Conclusion

Bitcoin price action stands at a critical historical juncture, retesting the highs of its 2021 bull market amid a perfect storm of technical breakdown, waning U.S. institutional demand, and intensifying macroeconomic headwinds. While oversold technical indicators like the RSI hint at a potential relief bounce, broader analyst sentiment warns of further downside, with $50,000 emerging as a key target. The cryptocurrency’s price movement is now inextricably linked to macro forces, including Federal Reserve policy, U.S. dollar strength, and historic volatility in traditional safe-haven assets like gold. Investors face a market where Bitcoin may not only be reacting to these conditions but potentially predicting future liquidity constraints across global financial markets.

FAQs

Q1: Why is Bitcoin’s price retesting 2021 levels significant?
Retesting the 2021 bull market high is significant because it represents a major historical support/resistance zone. If this level fails to hold as support, it could indicate a deeper bear market cycle and open the path to much lower price targets, as suggested by several analysts.

Q2: What does a negative Coinbase Premium mean?
A negative Coinbase Premium indicates that the price of Bitcoin on the U.S.-based Coinbase exchange is lower than on global exchanges like Binance. This typically suggests weaker buying demand or stronger selling pressure from U.S. investors compared to the rest of the world.

Q3: How are precious metals like gold related to Bitcoin’s price?
Bitcoin and precious metals are often considered alternative assets, and their prices can be influenced by similar macroeconomic factors, such as inflation expectations, real interest rates, and U.S. dollar strength. A massive sell-off in gold and silver, as currently seen, can reflect broader risk aversion that also impacts cryptocurrency markets.

Q4: What is a CME gap, and why do traders watch it?
A CME gap occurs when the price of Bitcoin futures on the Chicago Mercantile Exchange opens at a different level than it closed the previous day, leaving a “gap” on the price chart with no trading activity. Traders often watch these gaps because price action has a historical tendency to return to fill these voids, creating potential short-term trading opportunities.

Q5: What key economic events are affecting Bitcoin this week?
Major events include key U.S. economic data releases such as ISM Manufacturing PMI, JOLTS Job Openings, and weekly Unemployment Claims. Additionally, earnings reports from major tech companies (Alphabet, Amazon) and public speeches from Federal Reserve officials are closely watched for clues on the economic outlook and monetary policy.