Bitcoin (BTC) has formed a technical crossover between its 21-day and 50-day simple moving averages that preceded drawdowns of up to 69% in prior market cycles, with the cryptocurrency now trading near a key on-chain support level around $87,500.

What Happened: Death Cross Forms on Daily Chart

Analyst Ali Martinez posted a daily price chart on X showing Bitcoin's 21-day simple moving average has fallen below its 50-day SMA, a pattern that has historically preceded major price declines. The crossover, which smooths out short-term fluctuations to reveal longer-term trends, last appeared in 2022 before a 66% drop to the bear market bottom.

Previous instances of this signal led to drawdowns ranging from 54% to 69%, according to Martinez's analysis spanning the past decade.

The cryptocurrency is also trading near another technical level that bears watching. The Realized Price-to-Liveliness Ratio, which combines investor cost basis with long-term holder behavior metrics, sits around $87,500.

BTC briefly dipped below this mark during a Sunday selloff before recovering. "The last time Bitcoin $BTC fell below the Realized Price-to-Liveliness Ratio, it moved toward the Realized Price," Martinez noted. That level currently stands at $56,000.

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Why It Matters: Historical Pattern Signals Caution

The convergence of these two technical indicators creates a potential warning for traders who follow chart-based analysis. While past performance does not guarantee future results, the death cross has consistently preceded significant downturns across multiple market cycles.

Should bearish momentum develop, the gap between current prices and the $56,000 Realized Price level represents substantial downside risk.

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