Bitcoin Price Forecast: Is a 20% Correction Looming After 2021-Style Top?

Bitcoin (BTC) may be flashing a repeat of its 2021 top formation, raising the risk of a deeper correction in the weeks ahead.

BTC Price Outlook: A 20% Dip Within a Month Is Highly Possible

Bitcoin has slipped approximately 8% from its record high above $124,500, with chart patterns now hinting at a potential 20% downside by September.

BTC’s latest weekly close resembles the infamous 2021 double top, a bearish reversal pattern marked by two consecutive peaks near the same level.

Simultaneously, the cryptocurrency is forming a bearish divergence between its rising price and falling relative strength index (RSI), just like it did during the 2021 macro top formation.

Back then, Bitcoin collapsed by over 70%, dropping from $69,000 to under $16,000 within a year.

This time, BTC initially risks falling toward its 50-week exponential moving average (50-week EMA; the red wave), currently near $94,750, if the setup holds true. That would represent an approximately 20% drawdown from recent highs.

A decisive close below the 50-week EMA could potentially send the BTC price falling toward the 200-week EMA at around 60,275, an extreme bear market scenario.

What Could Change This View?

The current macro backdrop in Bitcoin markets is far more accommodative than in 2021.

Back then, BTC’s double top coincided with the Federal Reserve’s pivot to tighter monetary policy, including rate hikes and quantitative tightening, which drained liquidity from risk assets.

In contrast, 2025 is shaping up differently, with cooling inflation raising the Federal Reserve’s rate-cutting odds in September, according to CME data as of Monday.

Global M2 money supply has also been expanding, historically a bullish driver for Bitcoin. These liquidity tailwinds could soften, or even negate, the technical risks now emerging.

A drop toward the 50-week EMA wouldn’t necessarily confirm a bear market.

This level has consistently acted as a strong support since mid-2023. A successful retest and rebound could reinforce Bitcoin’s long-term bullish structure, paving the way for continuation toward new record highs, potentially $150,000 by 2025’s end.

Bitcoin’s MVRV Z-Score Signals More Upside Potential

The MVRV Z-Score, which measures Bitcoin’s market value relative to its realized value, has historically peaked above 7–10 during major market tops.

At present, the metric is hovering below half those levels, suggesting the current cycle has not reached the kind of extreme overheating that marked previous bull market peaks.

It indicates that while BTC faces short-term technical risks, its broader upside potential remains intact.

If historical trends hold, Bitcoin could still have room to climb significantly higher before hitting a true cycle top, supporting the case for further gains once short-term corrections play out.