Another lower high and lower low means that Bitcoin is on the verge of a fall to lower levels. $60K is the target. The next potential dip would take the $BTC price beneath the bull market trendline. Could this be the beginning of one final capitulation phase for Bitcoin?
Just waiting for the drop
Source: TradingView
As can be seen in the 4-hour time frame chart, the $BTC price is currently resting on the bull market trendline. This is after being rejected at the 200 SMA which has now formed resistance.
The price has certainly now lost touch with the head and shoulders pattern neckline, which the bulls tried so hard to get above. This means that the pattern is still playing out. If it continues to do so, the full extent of the measured move would bring the $BTC price down to around $60,400.
A small M pattern in the price action and the Stochastic RSI indicators heading down would appear to support a fall from here. It could be that the $62,250 horizontal level provides a bounce, but that may only be to the underside of the bull market trendline to confirm it as resistance.
Indicators and supports breaking down
Source: TradingView
In the daily time frame it can be seen that things are moving very quickly. The $BTC price has already come down through the bull market trendline and has reached the horizontal support level. While there is the possibility that a bounce could bring the price back above the bull market trendline, it is more likely that supports are flipped into resistances and the price goes down further.
At the bottom of the chart the RSI is displaying a breakdown of the indicator line below the ascending wedge. This is probably confirmation that more downside is on the way.
What’s more, the price is breaking down below the 50-day SMA. As mentioned in previous articles, in the previous two bear flags a similar thing happened and this was followed by a major crash on both occasions.
Much feared cross-down in the weekly Stochastic RSI
Source: TradingView
Here in the weekly time frame one can observe how the $BTC price is right on the very edge of breaking down below the bull market trendline. The weekly close was just below the 200-week SMA and that is probably what has started the rot.
Next to go would be the bull market trendline, and that is already looking extremely precarious. There is a modicum of support at $60K, but it would be expected that the $BTC price carries on down at least to the bottom of the descending channel. This would take the price down to $55K and below.
One last and extremely important factor here is the weekly Stochastic RSI. The much feared cross-down is taking place (red arrow). If this is confirmed after this week, a crash of similar proportions to those that plummeted out of the last two bear flags could be the result.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.