Analysis of Bitcoin Double Top Formation
In a recent analysis, crypto analyst Rekt Capital discusses the potential double top formation on the Bitcoin price chart. This pattern suggests impending volatility and has both bullish and bearish implications.
Key Points:
- The BTC double top formation is still intact, with weekly bearish divergence adding to its significance.
- Bitcoin’s volume behavior is intriguing, as recent peaks formed on increasing volume while the RSI formed lower highs.
- A distinct “M”-shaped formation is necessary for a double top, with two tops at $30,800 and $31,300.
- Losing pivotal support levels, such as the neckline at $26,000, could lead to substantial downward movement.
- If symmetry is maintained, a three-month second part of the M could result in further downside movement.
However, there are potential positive scenarios. A retracement to $24,000 would allow for a retest of the neckline as a new support, enabling further upside. Additionally, if Bitcoin can hold an ascending trendline from early January and bounce up from around $28,200 on a weekly basis, the double top formation would be invalidated.
Hot Take:
The potential double top formation on Bitcoin’s price chart brings both bullish and bearish narratives. Traders and investors should closely monitor key support levels and volume behavior to gauge potential market weakness or upside opportunities.
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