Bitcoin Faces Bearish Outlook Despite 2.50% Gain, Analysts Warn of 40% Drop
1min read Cryptocurrency analyst Cryptododo7 has issued a bearish outlook for Bitcoin, despite the cryptocurrency's recent price surge from $75,000 to $86,000 over the past three days. The analyst's caution comes as Bitcoin has formed a bearish pennant pattern, which is typically indicative of a potential downside. This pattern follows a double top formation, a classic reversal signal that aligns with the downward price action observed over the past three months.
The bearish pennant formation is characterized by a strong downward price move, known as the flagpole, followed by a period of consolidation where price action forms a small symmetrical triangle. This pattern is marked by lower highs and higher lows, bringing about two converging trendlines. Following this consolidation, the market price is expected to break below the lower trendline, confirming the intention of a price fall.
According to Cryptododo7’s analysis, the lower boundary of the bearish pennant is positioned around $74,000. A decisive close below this level would validate the bearish pattern and signal a likely continuation of the downtrend, with a projected price target of $51,400. This price target represents Bitcoin’s strongest support level, aligning with the 200-week moving average. The analyst suggests that a retest to this support level is reasonable, given the ongoing macroeconomic developments.
In addition to the bearish pennant pattern, there are other indications of short-term pressure on Bitcoin. Crypto analyst Ali Martinez reports that 56.18% of traders on the world’s largest exchange have opened short positions on Bitcoin, indicating a majority of traders are predicting a price decline despite the recent upward momentum. This aligns with Cryptododo7’s bearish warning, as a large volume of traders still hold a negative market outlook amidst recent gains.
Ask Aime: What is the potential impact of the bearish outlook for Bitcoin on the cryptocurrency market?
The current price of Bitcoin is $85,416, following a 2.50% gain in the past 24 hours. The analyst's bearish prediction, combined with the significant short positions opened by traders, suggests that the market may be poised for a correction. The projected price target of $51,400, if reached, would represent a significant decline from the current price levels. However, it is important to note that this is a forecast and the actual price movement may vary.
