Bitcoin’s recent recovery hasn’t hit the mark, with the cryptocurrency struggling to break past the $60,000 threshold despite renewed bullish momentum. This has led many analysts to foresee a bearish reversal, doubting Bitcoin’s ability to sustain its current uptrend. One such analyst is Finn Oakes, who predicts a drop back to around $53,000.
Spotting the Double Top Pattern
According to Finn Oakes’ analysis on Trading View, Bitcoin has formed a double top pattern on its 4-hour chart. This pattern emerged after Bitcoin twice approached the $59,000 level but failed to maintain its position above it. The double top is a classic bearish signal, suggesting the possibility of a continued downtrend that started last week, creating a tough road ahead for bullish traders.
Oakes highlights that the double top pattern underscores $59,000 as a significant resistance level. For Bitcoin to kick off a new rally, it needs to break through this resistance convincingly. On the flip side, $56,000 has emerged as a crucial support level for Bitcoin.
This sets up a tight $3,000 range for bulls and bears to fight over, potentially leading to more sideways trading if neither side can take control.
Predicting the Decline
Oakes anticipates that if Bitcoin falls below the $56,000 support level, it could trigger a decline toward the $53,000 mark. If this downtrend continues without interruption, Bitcoin might even slip further to around $52,000, though this represents a worst-case scenario.
The analyst also points out that trading volumes have been rising during recent declines, indicating increased selling pressure. “The trading volume has increased during recent down days, indicating strong selling pressure. This reinforces the current downtrend,” Oakes noted.
Currently, Bitcoin is trying to stay above the $58,000 level, showing a modest 1.08% gain in the past 24 hours according to Coinmarketcap.
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As Bitcoin faces this critical moment, traders and investors will be watching closely to see if the cryptocurrency can break out of this narrow trading range or if the bearish trend will continue.
