“Double top” pattern could push Bitcoin to $ 23,500
Peter Brandt, an experienced trader, known for suspect Exactly crypto market high in December 2017, suggesting that Bitcoin could form a “double top” pattern after falling more than 30% from its all-time high (ATH) of $ 69,000.
Brandt recall Bitcoin’s inability to extend the uptrend past the previous ATH, close to $ 65,000 after the second attempt. Meanwhile, he illustrated what is known as neckline support near $ 30,000 while warning of further decline below this key level.
Weekly BTC / USD Frame Price Chart with Top Pattern double | Source: TradingView
Is Bitcoin Price Likely To Fall 50%?
Specifically, traditional chartists see the formation of two consecutive tops, each leading to a strong retracement, as a sign of a bearish reversal. The downside target in the double top scenario is roughly the same depth as the height of the pattern formation.
But the bearish double top target is a little unrealistic here, as confirmation of the pattern shows Bitcoin price is falling nearly $ 35,000. That said, there is a risk of falling below $ 0, a very unlikely scenario.
However, if the price falls below the $ 30,000 neckline, Bitcoin’s ultimate downside target could be the 200-week exponential moving average (200-week EMA; orange wave in the graph below), which is currently about 50% below its current price which is nearly $ 23,500.
BTC / USD Daily Frame Price Chart with 200 Week EMA Support | Source: TradingView
The 200-week EMA is crucial in identifying bear market lows, as shown by the up arrows in the graph above. However, Brandt recalls:
“A chart pattern is not a chart pattern until it is completed and confirmed. Up until that point I wasn’t interested in that. “
Ignoring the prospect of a possible price drop, Bitpanda product manager Lukas Enzersdorfer-Konrad claims that Bitcoin’s price drop from $ 69,000 to $ 42,000 is similar to the drop in May 2021 after a new ATH.
“Similar to the recent decline, overused positions have increased volatility and destroyed most long positions,” said Enzersdorfer-Konrad with a view to the 2.5-inch liquidation in just a few hours on the 4th day correction for most liquid crypto Assets.
“The Bitcoin market is taking some time to recover in these situations and the daily chart is still volatile but still bullish on the higher timeframe,” added Konrad.
From a bullish technical point of view, independent market analyst “Wolf” says Bitcoin is oversold based on the Relative Strength Index (RSI) on the daily timeframe chart.
BTC / USD daily price chart with RSI bounce | Source: TradingView
Wolf predicts Bitcoin will test $ 51,780 as the next resistance with an expanded upside target near $ 60,000.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.