Bitcoin’s recovery was not as impactful as expected, failing to break above $60,000 even after bullish momentum returned. In light of this, expectations of a bearish reversal have become the norm, as analysts believe the pioneer cryptocurrency does not have enough momentum to sustain its current momentum. Finn Oakes is one analyst who believes prices are destined for a downturn, predicting a return to the $53,000 area.
Bitcoin forms double top pattern
In an analysis shared on the TradingView website, cryptocurrency analyst Finn Oakes explained that Bitcoin price has now formed a double top. This happened after Bitcoin price broke through the $59,000 level twice, both times the price failed to successfully break above the level.
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This double top pattern is shown on the 4-hour chart, thus forming a reversal pattern. This double top is bearish for price and may signal a continuation of the downtrend that began last week. In this case, the Bulls face an uphill battle.
The cryptocurrency analyst explained that $59,000 is now a strong resistance area after breaking out of the double top. This means that for any rally to occur, the price must successfully break above this resistance level to be confirmed.
Contrary to the resistance, $56,000 has now become a support level for Bitcoin price. This gives bulls and bears a tight $3,000 space to fight for dominance and push the price higher. Otherwise, the sideways trend may continue.
falling target
Cryptocurrency analysts expect prices to fall again given the formation of a double top on the 4-hour chart. In the first scenario, Bitcoin price falls below the $56,000 support, with cryptocurrency analysts predicting a decline to $53,000 levels.
However, if the downtrend doesn’t stop, it won’t be completely over. In this case, the chart shows the price falling below the $53,000 level and moving towards $52,000. Still, this seems to be the worst-case scenario and not the intended goal.
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Additionally, analysts believe that as volume increases in a downtrend, this suggests there is more selling activity in the background, which could lead to lower prices. “Trading volume has increased during the decline in recent days, indicating strong selling pressure. This reinforces the current downward trend,” Oakes said.
As of this writing, Bitcoin price is struggling to maintain the $58,000 level. However, it was still up 1.08% on the last day, according to Coinmarketcap data.
Featured image created using Dall.E, chart from Tradingview.com