Bitcoin’s price was displaying an intriguing but severely bearish configuration, which had already been violated. As a result, investors should be cautious when it comes to BTC and altcoins, as a continuation of this trend could result in significant sell-offs.
Bitcoin appeared to be forming a bear flag, which is a bearish continuation pattern. The flag pole was formed by a 52 percent drop in price from its all-time high of $69,000 to $32,837. Following this downturn, BTC experienced a period of stagnation, with a sequence of higher highs and lower lows. A flag is formed by connecting these swing points with trendlines to produce an ascending parallel channel.
If the flag’s lower trendline at $40,0032 is breached, this technical structure points to a 46 percent drop. The pessimistic objective is calculated by multiplying the height of the flagpole by the breakout point, resulting in a price of $21,584 for Bitcoin.
On April 23, the price of bitcoin not only triggered a negative breakthrough but was also rejected during the following recovery rally. This is a clue that the bear flag’s bearish outlook has already been activated.
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Possibility Of Massive Bitcoin Crash
At $36,271, there is a support level that could put a stop to the negative scenario. A break over this barrier, which would bring Bitcoin’s price back into the bear flag, would invalidate the setup and trap early sellers.
Only a weekly finish below $36,271 will confirm a negative perspective and precipitate a drop below the psychological level of $30,000. Aftermarket makers amass liquidity lying below the equal lows produced around $29,000, this barrier could serve as a stable support level.
The sell-off might extend to the national target of $21,584 if ordinary traders succumb.
While things are looking up for the king cryptocurrency, failing to return to the downward trend of the bull flag would result in a pessimistic outlook. A daily candlestick close above $41,000, on the other hand, will generate a higher high, invalidating the bearish argument.
In such a scenario, BTC Price could rise above $45,000. Before BTC finds a support level for additional rallies, a local top will form.
Whales Responsible For DownFall?
As Per Santiment Data, the number of Whales Holding 10,000 to 100,000 BTCs are declining. Since November 2020, these whales have been selling their tokens and thus the total wallets have reduced from 110 to 83.
This decline indicates that BTC holders are selling their holdings. Hence it seems that investors are expecting more sell-off grabbing a better opportunity to buy at a discounted price.