Bitcoin at a Critical Crossroads: Will It Break Free from Its Bearish Trend?
Bitcoin (BTC) finds itself at a pivotal moment as it continues its downward trajectory, showing signs of potential volatility in the near future. The cryptocurrency remains locked in a series of lower highs and lower lows, a trend that veteran trader Peter Brandt says must be broken for a bullish reversal to take place.
Bitcoin’s Struggle to Reverse Its Bearish Trend
Over the past six months, Bitcoin’s price action has been dominated by sharp declines, with the digital asset reaching an all-time high of $73,666 in March 2024. Since then, Bitcoin has failed to sustain its bullish momentum, with a slight pullback in April that set the tone for the continued downtrend. The July 29th high of $70,162 further cemented the bearish outlook, as Bitcoin continued to form lower highs.
According to Brandt, Bitcoin’s inability to surpass these key resistance levels indicates that the market is still trapped in a bearish structure. A recent high of $65,200 suggests that Bitcoin is still struggling to break through the upper resistance of its descending triangle.
Expanding Triangle Pattern Suggests Increased Volatility
The daily chart reveals an expanding triangle pattern, which is often associated with heightened volatility. Bitcoin has experienced larger swings between its highs and lows over recent months, suggesting that a major price move may be on the horizon. If Bitcoin breaks out of this pattern, it could either confirm the current bearish trend or signal a reversal.
Brandt highlights the July 29th high of $70,162 as a critical level. A decisive close above this resistance could break the lower-high pattern and potentially spark a bullish breakout. However, on the downside, key support levels sit at $53,219 and $49,130. A drop below these levels would confirm the continuation of the bearish trend.
Bitcoin Consolidation Phase: Awaiting the Next Big Move
At the time of writing, Bitcoin is trading at $63,574, with the Average Directional Index (ADX) standing at 19.13. An ADX below 20 indicates that the market lacks a strong trend, suggesting that Bitcoin may be in a consolidation phase, waiting for a stronger breakout before making its next major move.
Can Bitcoin Reach $130K?
Interestingly, market analyst Colin recently discussed the possibility of Bitcoin soaring to $130,000 if it breaks its all-time high of $73,000 reached in March. Colin notes that Bitcoin is currently trading within a pattern that could be interpreted as a cup and handle formation or an inverted cup and handle. Brandt had previously identified a similar pattern when comparing Bitcoin to gold.
Read more Bitcoin Remains in High-Risk Zone, Signals Potential for Sharp Correction: A Historical Perspective
However, another market observer pointed out that Bitcoin’s current structure might resemble a bullish flag. In response, Brandt suggested that while a bullish flag cannot last indefinitely, a longer-term uptrend could follow the breach of a descending channel.
As Bitcoin navigates these critical levels, the market eagerly awaits to see whether the cryptocurrency can break free from its bearish trend and embark on a new bullish journey.
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