The Bitcoin (BTC) market is showing signs of a possible trend reversal after the formation of a double top on the price chart. This month, the cryptocurrency has experienced a volatile trajectory, with its value reaching nearly $70,000, close to the historical peak in March, before retreating to $63,000.
This downward movement comes amidst a decoupling from the upward trend of the Nasdaq, amplified by accelerated selling from miners and profit-taking by investors near the all-time high, as well as withdrawals from US exchange-traded funds (ETFs).
The double top pattern is a bearish technical signal recognized in the financial market, consisting of two peaks with a trough in between. Typically, this pattern emerges after a significant uptrend. The second peak indicates exhaustion of the uptrend, and a potential break of support between the peaks could confirm a shift to a downtrend.
“From a technical standpoint, Bitcoin seems to be forming a double top pattern while testing the support level. This chart pattern should be considered our primary scenario unless proven otherwise. This pattern could potentially lead to a drop to $50,000 – if not $45,000,” said Markus Thielen, founder of 10x Research. “While the US elections and CPI may provide bullish sentiment later this year, we could still see a more significant correction,” Thielen added.
Bitcoin Price Analysis
At the time of writing, the price of Bitcoin was quoted at $61,404.04, with a 4% drop in the last 24 hours and a 6% drop in the week.
On the other hand, an analysis of Bitcoin’s three-day chart suggests a possible reaccumulation pattern. Currently, Bitcoin seems to be testing support levels, indicating a potential significant rally ahead.
This pattern suggests a potential consolidation phase followed by a strong price increase, possibly surpassing previous highs. While this pattern does not guarantee future results, it provides a structured approach to assessing market dynamics and identifying emerging opportunities.
Overall, the Bitcoin price is trading below the $62,500 resistance zone. BTC must surpass $64,500 to initiate a strong upward movement.
Disclaimer: The opinions expressed in this article are for informational purposes only and do not constitute financial or investment advice. Investing or trading cryptocurrencies carries a risk of financial loss.
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