Bitcoin’s BTC$70,483.40 price action is giving us a sense of déjà vu, and it’s not the good kind.

If you look at the price swings since early February, a very specific, ominous pattern is forming that looks strikingly similar to the setup we saw between November and January. That set up eventually paved the way for a crushing sell-off to nearly $60,000.

We are looking at what technical analysts often call a counter-trend recovery – a modest bounce within a downtrend.

Here is the chart. Check out the two yellow channels.

The first yellow channel, on the left, shows price action from Nov. 20 to Jan. 20. Back then, bitcoin traded in a narrow range, with a slight upward tilt after a drop from $100,000. It looked like the price was recovering, but in reality it was just a pause – or a small bounce – within a larger downtrend.

The result was that the price eventually broke below the bottom of that trading range. Essentially, the level traders had been treating as a “floor”, or support, gave way, and bitcoin plunged in a straight line from about $90,000 down to nearly $60,000 by Feb. 6.

Now look at the second channel on the right.

Since hitting those lows in early February, bitcoin has once again traded in a narrow range with an upward tilt, contained perfectly between those two trendlines.

The similarity with the earlier pattern is undeniable. The present relief rally lacks the explosive momentum just as the November-January pattern did. It’s a slow, choppy grind upwards. In technical analysis theory, this is a sign of bullish exhaustion, with the market simply pausing for breath before the bears recharge their engines.

What next?

Charts aren’t a holy grail, and past performance doesn’t guarantee future results. Still, traders use them to read market psychology, and right now, they’re telling a tale of a “buy the dip” crowd that lacks strength and conviction.

If bitcoin falls below the lower trendline of its current channel, around $65,800, it could signal a return of bearish control.

The takeaway is that bitcoin is at a major decision point. The bear market could deepen, as some anticipate, if prices break below the channel formation. If it breaks out above the channel, the downtrend could lose steam, and the bulls could then make a strong comeback.