Despite recent gains in the cryptocurrency sector, Bitcoin has experienced a sudden downturn by confirming a bearish technical pattern, signalling a potential significant correction ahead. Stay tuned for market trend analysis.
With selling pressure intensifying and market sentiment growing more cautious, investors are closely watching Bitcoin‘s ability to find a stable support level. If sellers remain in control, BTC could potentially face further declines.
Indeed, after breaking out of the bullish wedge pattern, Bitcoin has extended its bearish momentum, indicating a shift of control from bulls to bears. This breakout from a classic reversal pattern has triggered a wave of selling pressure.
The inability of BTC to regain ground further confirms the negative outlook, with each recovery attempt facing stronger resistance. The formation of multiple red candles indicates sustained bearish pressure, with sellers firmly in control. This pattern suggests that Bitcoin is struggling to find a solid support level, increasing the risk of further declines.
Bitcoin’s technical indicators also reinforce the bearish outlook, with a strong sell signal generated by the MACD (Moving Average Convergence Divergence). The MACD line has crossed below the signal line and is now moving away from the zero line, confirming a reversal in bearish momentum. Typically, this crossover suggests that selling pressure has intensified while buyer interest has weakened. BTC has also bounced off the bottom of its red Ichimoku cloud on a daily basis.
This recent breakdown has also led to a drop in price below the 100-day simple moving average, a critical technical level that often acts as a dynamic support or resistance. Additionally, the SP500 has also fallen below its 200-day moving average. Historically, this aligns with significant market declines. Consequently, BTC may struggle to bounce back in the coming weeks, as it is correlated with the SP500.
Bitcoin’s failure to hold above this important moving average indicates that selling pressure is intensifying, making it harder for bulls to regain control. Historically, when BTC trades below the 100-day moving average, it also suggests a weakening momentum and increases the likelihood of a more pronounced downward movement.
Bitcoin is now approaching a crucial support level at $73,919, a price zone that could determine its next major move. If BTC breaks below this demand zone, the bullish trend initiated 10 days ago will be invalidated, potentially pushing its price even lower.
This level has emerged as a potential safety net for BTC, and its ability to defend it will be essential in guiding the market direction.
If buyers step in with strong demand, Bitcoin could bounce back from this support, reclaiming lost ground and challenging resistance levels above. A successful defense of $73,919 could signal that bulls are still in the game, creating a trend reversal opportunity.
However, if selling pressure remains dominant and BTC fails to hold this level, the risk of an extended downward move increases, with the asset targeting other supports like $65,082 and $60,152.
It is noteworthy that the average purchase price of BTC investors is at $64,000. Furthermore, the 200 WMA is at $45,000. These are two zones historically witnessed in BTC retracements. A drop below $75,500 would hence push the BTC price between these two significant price levels for BTC.
The bearish scenario is becoming increasingly evident for Bitcoin, with the breakdown of a bullish technical pattern and a clearly bearish momentum. With technical indicators reinforcing this negative outlook, investors will closely monitor BTC’s ability to stabilize above the key support at $73,919.
If this price zone were to give way, the risk would then be high for Bitcoin to sink further, potentially between $64,000 and $45,000. In this context, caution is advised for investors, who will need to carefully track price movements and market dynamics in the coming weeks.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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