Bitcoin tests bear-market pattern as ETF outflows persist

Bitcoin chart pattern signals a bearish setup, what the data implies

The worst may lie ahead for Bitcoin, with price action revisiting a historic pattern that previously foreshadowed deeper phases of prior downtrends. The setup reflects a market leaning defensive, where sellers test support while rallies fade faster than in early-cycle pullbacks.

Pattern analogs are a framing tool rather than a forecast. They help contextualize risk by comparing today’s structure with earlier cycles, but any path from here remains contingent on flows, liquidity, and how quickly confidence stabilizes.

Pattern echoes and spot Bitcoin ETF outflows: why this matters

As reported by CoinDesk’s Daybook Americas, the same Bitcoin chart pattern that presaged the final and deepest phases of previous sell-offs has resurfaced, coinciding with net outflows from spot Bitcoin ETFs. The combination matters because ETFs redistribute supply-and-demand through a regulated wrapper, so redemptions can thin liquidity and amplify directional moves in either direction.

At the time of this writing, Bitcoin (BTC) is around $65,900, while sentiment indicators flag a Bearish backdrop alongside high short-term volatility near 9%. Momentum is mixed: the 14-day RSI sits near 42, and the spot price remains below its 50-day and 200-day simple moving averages. Taken together, these conditions align with a cautious, range-bound to downside-skewed tape.

Flows and patterns often coincide, but correlation is not causation. ETF redemptions can reflect de-risking already underway, and reversals in flows have previously followed sharp drawdowns, so monitoring the direction and persistence of net creations/redemptions is as important as the headline totals.

Key levels, scenarios, and institutional exposure, including MicroStrategy

According to BeInCrypto, technicians are watching the 0.618 Fibonacci retracement near $57,000 as an important gauge; a decisive failure there could open a path toward roughly $42,000 in a more severe case. These are reference levels, not predictions, but they frame the range where market behavior in past cycles has shifted from consolidation to capitulation.

Institutional exposure is not uniform, yet concentration risks exist where balance sheets are tied to BTC. As reported by TheStreet, Michael Burry has warned that deeper declines below key thresholds could pressure companies with large Bitcoin holdings, such as MicroStrategy (MSTR), by increasing the risk of a capital-markets “blackout” if conditions deteriorate.

Scenario analysis under this backdrop typically weighs three paths: a base-building range above major retracement markers, a deeper drawdown that mirrors prior late-cycle legs, or a recovery track if liquidity improves and selling pressure fades. The distribution across these paths will likely hinge on whether ETF flows stabilize and whether spot price can re-establish traction above medium-term trend gauges.

Michael Burry’s Bitcoin warning, what would invalidate the pattern

According to CryptoNews, Michael Burry has overlaid Bitcoin’s decline from its October 2025 peak onto the 2021–2022 bear-market template, arguing that the current structure could allow another leg lower if the analogy holds. Invalidation would require a visible divergence from that overlay, such as defending key retracement support, improving breadth, and a shift in ETF flows from persistent outflows to stable or net inflows.

Following this logic, the pattern’s relevance would likely fade if buyers repeatedly repel breakdown attempts and the market stops reacting to prior-cycle trigger levels. That kind of behavioral change has historically preceded turns where analogs lose explanatory power.

“death spiral,” said Michael Burry, founder of Scion Asset Management, describing cascading risks if conditions worsen.