Bitcoin below $65K and VWAP – Historically, this is what happens

Bitcoin has currently fallen below $65,000, a significant price level which aligns with the previous all-time highs of 2022.

But more importantly, it is reacting to the average Volume-Weighted price at approximately $63,885, anchored from BTC’s extreme lows in 2022; bouncing slightly for now.

So what will happen next? Well, history has demonstrated that Bitcoin is close to finding its bear market bottom, but also hints at likely lower prices.

Let’s take a look at the pattern.

Bitcoin’s "bottoming pattern"?

Bitcoin is once again testing its 2022 anchored vWAP, currently sitting near $63,841 to $63,900, depending on the broker feed. At the same time, price structure suggests a potential bear flag projection toward the $53,000 area.

That does not mean price must reach that level. The exact target is less important than the behaviour around it.

What matters is whether Bitcoin:

• Consolidates above VWAP without losing structure, or
• Falls below VWAP, bases out sideways, and then reclaims it.

Historically, the second outcome has been the cleaner and more reliable signal.

Broader market conditions add another layer of caution. With the S&P 500 beginning to correct, Bitcoin may remain suppressed in the near term, either drifting lower or moving sideways as risk appetite resets.

Two scenarios to watch

Scenario 1: 

Bitcoin bounces here and moves higher, potentially stalling near $73,885, the mid-2024 highs. If price consolidates sideways at current levels, a rally could still develop, but it would lack the clearer VWAP reclaim signal that has historically marked stronger cycle transitions.

Scenario 2:

Bitcoin produces only a brief bounce or trades through VWAP, drifting lower toward its bear flag region. Price then consolidates sideways below the 2022 anchored VWAP before reclaiming it. Historically, this sequence has been more consistent with proper bear market basing.

Again, the exact downside level is secondary. The key signal is sideways consolidation followed by a VWAP reclaim, not the first reaction bounce.

On-chain data supports lower prices

On-chain data support the view that this bear market / bottoming process may not yet be complete.

Net Unrealised Profit and Loss (NUPL) indicates that a meaningful portion of Bitcoin holders remain in profit. In previous bear market lows, this metric has typically moved into negative territory before a durable base was established, even though the depth of those drawdowns has moderated over time.

Taken together, Bitcoin’s interaction with the anchored VWAP suggests the market may still be in the process of forming a low rather than launching immediately higher.

If history is a guide, patience may be required, with the clearest confirmation coming not from a short-term bounce, but from a sustained reclaim of VWAP after consolidation.