Bitcoin (CRYPTO: BTC) is retesting a key support level at $73,000, and according to analyst Tim Warren, the setup mirrors exactly what preceded the last bull run.
Fear and Greed Hits Extreme Fear
Warren told Milk Road Crypto that Bitcoin's fear and greed index has fallen into extreme fear territory for the first time since August. Yet Bitcoin still trades 17% higher than the last time sentiment reached this level.
"I'm a buyer today," he said, calling that divergence "a screaming healthy correction." He argues retail investors are reacting to a wave of bearish headlines, the Binance hack, the Democratic midterm sweep, and hotter-than-expected inflation data, that mirrors past cycles right before major rallies.
Warren pointed to several fair value gap zones he's watching below current prices: $72,900, $71,600 and $68,400. He's buying spot Bitcoin at the 200-day moving average now, and would still view a drop to $68,400 as constructive.
But if Bitcoin breaks below the broader bear market low near $57,700, he said his confidence that level holds would drop from 90% to roughly 70%.
Why Warren Abandoned the Four-Year Cycle
Warren said he stopped relying on Bitcoin's traditional four-year halving cycle roughly 18 months ago, since this cycle's low landed in July rather than the October timing the model would have predicted.
He argued institutional capital, not halving-driven scarcity, now drives Bitcoin's price action, making halving events increasingly irrelevant going forward.
However, he still tracks recurring technical patterns across prior cycles, including Bitcoin breaking its bear market trendline and 200-day moving average before retesting that average and continuing higher. That sequence played out in 2018-2019, 2014-2015 and the current cycle alike.
Solana, Near and XRP on the Watchlist
Warren is accumulating Solana (CRYPTO: SOL) near $82 and Near Protocol (CRYPTO: NEAR) near $3.70, with a fair value gap near $75 on Solana and another near $3.20 on Near marking deeper buying zones if the selloff continues.
Meanwhile, XRP's (CRYPTO: XRP) drop toward $1.04 surprised him most. He attributed it to fading expectations for Clarity Act passage now that Democrats control both chambers of Congress.
On the macro side, Warren expects oil prices to fall once the Iran war ends, which could pull inflation data down faster than markets currently expect and give the Fed room to pause rate hikes.
December's decision remains uncertain, with prediction markets pricing roughly 82% odds of a hike, but he said a resolution in Iran could shift that calculus quickly heading into 2027.
