“Double top” pattern could push Bitcoin to $ 23,500
Peter Brandt, an experienced trader known for suspect This is exactly the high of the cryptocurrency market in December 2017, which suggests that Bitcoin may form a “double top” pattern after falling more than 30% from its all-time high (ATH) of $ 69,000.
Brandt withdraw Bitcoin’s failure to extend the uptrend beyond the previous ATH close to $ 65,000 after the second try. Meanwhile, he illustrated the so-called support for the neckline near $ 30,000, while warning of further decline below this key level.
BTC / USD Weekly Price Chart with Double Top Pattern | Source: TradingView
Most likely the bitcoin price will drop 50%?
In particular, traditional charting specialists view the formation of two consecutive tops, each of which leads to a strong pullback, as a sign of a bearish reversal. The bottom target in a double top scenario is about the same depth as the height of the pattern formation.
But the bearish double-top target is a bit unrealistic here as the confirmation of the pattern shows the bitcoin price is down nearly $ 35,000. However, there is a risk of falling below $ 0, which is a very unlikely scenario.
However, if the price falls below the $ 30,000 neckline, the ultimate target for Bitcoin’s decline could be the 200-week exponential moving average (200-week EMA; orange wave in the chart below), which is currently about 50% below the current price, which is almost 23,500 dollars.
Daily BTC / USD Price Chart with EMA Support 200 Weeks | Source: TradingView
The 200-week EMA is critical for identifying bear market lows, as shown by the up arrows in the chart above. However, Brandt recalls:
“A chart pattern is not a chart pattern until it is completed and confirmed. Up to this point, I was not interested in this. ”
Ignoring the prospect of a possible price drop, Bitpanda Product Manager Lucas Enzersdorfer-Konrad argues that the drop in the bitcoin price from $ 69,000 to $ 42,000 is similar to the fall in May 2021 following the new ATH.
“Similar to the recent downturn, overused positions have increased volatility and wiped out most long positions,” Enzersdorfer-Konrad said, referring to liquidating the 2.5-inch currency in just a few hours on the 4th day of correction for the most liquid cryptoassets.
“It takes time for the bitcoin market to recover in these situations and the daily chart is still volatile but still bullish on the higher timeframes,” 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 rebound | Source: TradingView
Wolf predicts that Bitcoin will test $ 51,780 as the next resistance with an extended upside target of around $ 60,000.