A Bearish Fractal Raises Concerns of Bitcoin Price Crash
A well-regarded crypto analyst, Rekt Capital, has conducted a detailed analysis revealing a recurring bearish fractal in Bitcoin’s historical price data. This pattern, previously observed in 2019 and 2022, appears to be reemerging in the current market. The fractal indicator identifies potential turning points on a price chart by highlighting repetitive patterns. In this case, a bearish fractal suggests a potential decline in price, indicated by a peak price with two consecutively lower high bars/candles. This raises prospects of a potential crash below the $20,000 mark.
The Bearish Pattern and Potential Scenarios
The bearish pattern begins with a double top, followed by a relief rally forming a lower high. Eventually, the price crashes below the previous support level, which then turns into resistance. This sequence has been observed in previous instances of the pattern and is currently seen in the 2023 market. Rekt Capital suggests that the market may be in the middle of this bearish fractal, with uncertainty surrounding where the relief rally might conclude.
According to Rekt Capital’s analysis, Bitcoin’s price could potentially rally up to around $29,000 before experiencing further declines. Key events to monitor include overextensions beyond the bull market support band and revisiting the lower high resistance. The bearish outlook remains intact if these criteria are not met. However, certain factors could invalidate this perspective, such as consistent support from the bull market support band and breaking past the $31,000 yearly highs.
Technical Indicators and Crucial Junctures
Rekt Capital also highlighted that Bitcoin has recently rallied to the 200-week moving average (MA), which is acting as resistance along with the lower high resistance. This presents a crucial juncture for Bitcoin’s price in the near future. Despite a macro bullish stance on Bitcoin, Rekt Capital cautions that the cryptocurrency has yet to overcome the $28,000 lower high resistance in the 1-week chart. On the daily chart, it is important for Bitcoin to maintain a position above $27,372 to avoid descending beneath the established trend line.
Hot Take: Potential Bearish Fractal Raises Concerns About Bitcoin’s Price
A detailed analysis by Rekt Capital has brought attention to a recurring bearish fractal in Bitcoin’s price history. This pattern, previously seen in 2019 and 2022, is now appearing in the current market, raising prospects of a potential crash below $20,000. The bearish fractal is characterized by a double top followed by a relief rally forming a lower high, eventually leading to a price drop below previous support levels. Rekt Capital suggests that the market may be in the midst of this pattern, with uncertainty surrounding where the relief rally might end. It is important to closely monitor key events and technical indicators to assess whether this bearish outlook remains valid or if other factors could invalidate it.
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