- Bitcoin price is showing a bear flag fractal form on a lower timeframe, forecasting a 30% crash.
- A breakdown of the $30,000 psychological level from a weekly time frame would further help the bears’ case.
- The macro bearish outlook could face invalidation if BTC produces a higher high above $52,000.
Bitcoin price is forming a fractal, suggesting that the downtrend is around the corner. This new development further strengthens the macro bearish thesis for BTC.
Bitcoin price prepares for brutal sell-off
Bitcoin price confirmed a bear flag setup as it breached the pattern’s lower trend line on May 6. This move triggered a 36% crash in a week. Zooming out shows that BTC’s nosedive from an all-time high at $69,000 to $32,837 between November 10, 2021, and January 24, 2022, created the pattern’s flagpole.
After this flash crash, Bitcoin price consolidated in the form of higher lows and higher highs between January 14 and May 22, creating an ascending parallel-like structure known as a flag.
This technical formation projects a target of $18,179, which was confirmed the moment Bitcoin price dropped below $38,305. So far, Bitcoin price has paused its selling to consolidate around the $30,000 psychological level. A daily candlestick close below this foothold will likely trigger a further decline to the target of roughly $20,000.
While this pattern has been ongoing for quite some time, the recent consolidation seems to have created another bear flag, which forecasts a 30% drop to, more or less, the same target of $20,000.
This fractal formation further affirms that an eventual drop in Bitcoin price seems likely. Moreover, the development opposes the possibility of a relief rally to $35,000 or higher. Hence, investors need to be careful as BTC consolidates with no directional bias in play.
BTC/USDT 1-day chart
While things are looking gloomy for Bitcoin price, a spike in buying pressure that pushes BTC to $35,000 will invalidate the smaller bear flag. From a macro perspective, if the big crypto bulls propel the asset to produce a higher high above $52,000, it will invalidate the massive bearish thesis.
In such a case, Bitcoin price could climb higher and perhaps retest its all-time high at $69,000.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
MANTA suffers 4% pullback after unlocking tokens worth $40 million
Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks.
XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says
The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30.
Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction
Merlin chain’s TVL added 20% this week, and crossed $800 million on Thursday. Bitcoin Layer 2 assets noted double-digit losses in the past week. Stacks, Elastos, SatoshiVM, BVM are hit by a correction as Bitcoin hovers around $61,000.
If Bitcoin restarts bull run, these altcoins are likely to explode Premium
If Bitcoin’s consolidation ends and the bull run resumes, altcoins are likely going to trigger a massive rally. Last cycle’s hot tokens like SOL, AVAX, WIF, ONDO, etc., could see renewed enthusiasm.
Bitcoin: BTC’s rangebound movement leaves traders confused
Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established.