Bitcoin (BTC), which is a cryptocurrency, has dropped to below $60,000. key psychological supportThe crypto market was further pushed to its limit on Thursday by losses in the megacap technology sector.
BTC/USD vs. Nasdaq and S&P 500 daily performance chart. TradingView
This decline may cause the BTC to drop below $54,000 in the days ahead.
The key takeaways
- Bitcoin’s fall below $60k has erased June gains, and created multiple bearish patterns.
- Bitcoin’s daily bear flag and rounded-top breakdowns both indicate a target price below $54,000.
BTC’s top rounded breakdown indicates more pain to come
BTC/USD fell by as much as 4,8% on Thursday. It hit an intraday minimum near $58,000, wiping out its entire advance in June. This pullback completed what appeared to be a top rounded pattern on the 4-hour chart.
BTC/USD 4-hour chart tracking the round top bearish set-up. TradingView
A rounded top is formed in technical analysis when the buying momentum slowly exhausts. This shifts an asset’s trend from up to down, creating an inverse U-shaped pattern. When the price falls below the pattern’s minimum, the pattern is officially resolved. “neckline” Or the base support of the structure.
The analysts can determine the exact target distance by measuring and calculating the distance between the neckline of the dome, the height at the top (the “dome”) and the point where the breakpoint is.
This is the measured target for Bitcoin’s downside. just under the $54,000 levelPrices will drop approximately 8.9% compared to current levels.
Bitcoin’s daily chart has also triggered the bear flag.
BTC/USD chart showing the daily bear flag setup. TradingView
It is important to note that this pattern also predicts an identical movement towards $54,000, which adds weight to bearish arguments.
Bitcoin MVRV Bands Increase $54,000 Target Odds
Bitcoin’s price bands on the chain also indicate the same area of downside highlighted by the round-top setup and the bear-flag.
Glassnode’s MVRV price bands compare Bitcoin’s market price and its realized or average price. Simply put, the bands show if there is a market that has unusually large profit or loss levels.
BTC MVRV price bands in relation to the current market rate. Glassnode Source
Bitcoin’s price was around $62,997 on Wednesday. The 1.0-MVRV band (shown in green) was at $53,390. The level matches closely the technical downward target at $54,000. It is an important area of support for BTC if it continues to decline.
Related: Bitcoin nearly loses $59K as DXY surges: Are traders bracing for more pain?
However, a deeper drop could drive Bitcoin to the blue 0.8-MVRV band near $42,700. In past years, the major bottoms of Bitcoin’s bear markets have been formed near this blue lower band. This is when unrealized losses reach extreme levels and capitulation becomes a risk.
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Source: cointelegraph.com
