Is Bitcoin Repeating History? A 2021-Style Double Top Might Be in Play.

Bitcoin (BTC) is inching closer to its all-time high, but signs of weakening momentum are prompting comparisons to its 2021 double-top formation — a pattern that preceded a major market correction.

Currently trading just below $109,000, Bitcoin has surged amid softening tariff tensions and renewed investor appetite. But several on-chain indicators hint the market may be overheating.

The Relative Strength Index (RSI), a key momentum gauge, has now formed its third bearish divergence since March 2024 — signaling weakening buying pressure despite rising prices. Trading volumes have also thinned out, especially on institutional platforms like CME, where contract activity has fallen significantly from January peaks.

Open interest is down 13% since the last high, while prices are only 5.8% off. In 2021, a similar dynamic played out, with open interest falling even as BTC reached a new peak of $69,000.

Market structure has evolved significantly since then — driven by spot ETF launches, corporate accumulation led by MicroStrategy, and growing institutional exposure. But analysts warn this doesn’t shield Bitcoin from speculative overextension.

“There’s optimism about a potential U.S. Bitcoin reserve announcement under Trump, but it could easily become a ‘sell the news’ event,” one analyst noted, drawing parallels to 2021’s Coinbase IPO-driven spike and subsequent crash.

Also at risk: Bitcoin DeFi, which now holds $6.3 billion in TVL, and memecoin markets that tend to unravel under pressure. MicroStrategy’s leveraged exposure may further amplify volatility if a correction begins.

While a breakout above $109,000 remains in play, analysts caution that overstretched positioning could set the stage for a pullback. Just as in 2021, bullish sentiment may mask cracks forming beneath the surface.