Bitcoin (BTC), a digital currency, dropped to less than $60,000 in the last few days. 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.
Takeaways from the conference:
- Bitcoin’s decline below $60k erased all of its gains from June and has activated several bearish sets-ups.
- Bitcoin’s round top and the daily bear-flag breakdowns project a downward target of below $54,000.
BTC’s round top is a sign of more trouble ahead
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. On the four-hour graph, it appears that this pullback has completed what looks like a top rounded pattern.
BTC/USD chart showing the bearish rounded-top setup. 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” The base of the structure.
Analysts can calculate the target by measuring from the top dome of the structure to its neckline, and then projecting the same distance down from that point.
This is the measured target for Bitcoin’s downside. just under the $54,000 levelThe price of a. This represents a drop by approximately 8.9% from the current market prices.
Bitcoin is also showing a bull flag break-down on the daily chart.
BTC/USD Daily Chart Tracking the Bear Flag Breakdown Setup TradingView
It is important to note that this pattern also predicts an identical movement towards $54,000, adding weight to bearish arguments.
Bitcoin MVRV bands increase target odds by $54,000
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 MVRV’s pricing bands compare Bitcoin market price to its realized price or average price of coins that were last traded on-chain. Simply put, the bands show whether there is a market that has unusually large profit or loss levels.
BTC-MVRV Pricing Bands vs. Price. Glassnode is the 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 the past, Bitcoin’s bear market bottoms formed at this lower band of blue, which is where losses are extreme and capitulation risks increase.
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Source: cointelegraph.com
