It might be taking a while, but the long-expected crash for Bitcoin may not be that far away now. Lower highs since mid-June have left the number 1 cryptocurrency wavering on the brink at $59K. Is the drop about to happen? Are buyers coming in at this level?
Lower highs leading to a breakdown?
Source: TradingView
The 4-hour time frame shows us that edge that the $BTC price is balanced upon. There is nothing to say that it won’t bounce from here and regain the bull market trendline. That said, given the very bad market sentiment, and the large outflow from the U.S. Spot Bitcoin ETFs, a breakdown would seem likely.
However, it must be taken into account that it’s precisely at times like these when all seems to be lost, that a rally can be the unexpected result. Longish candle tails to the downside are signs that buyers are coming in at this level and are buying up any attempts of the bears to force the price below $59K. Until such time as this level definitively breaks, the bulls are still in the game.
The series of lower highs is what the bulls must interrupt first. It could be that a pennant is forming here, with those lower highs counteracted by higher lows. The problem with this is that it is a bearish pattern, and given that the price has arrived here from a breakdown, a continuation of the bearish trend is more probable than not.
A fall below support today or Wednesday?
Source: TradingView
In the daily time frame it can be seen that the $BTC price is generally respecting a small down trend line. If this continues, the price would fall below this last support either today or on Wednesday, so things may be coming to a head sooner rather than later.
The Stochastic RSI in this time frame has just experienced a cross up, which is good news for the bulls, but as the indicator lines did not quite reach the bottom, there is still room for them to cross back down.
A yawning gap if support fails
Source: TradingView
The weekly time frame illustrates the yawning gap down to the low $50K level if the current support plus $57,500 should fail. Also, the $BTC price is holding below the 200-week SMA and the bull market trendline for the second successive week. This is the critical week, because the candle will either move back above the big trendline and the SMA, or it will confirm below. If it is confirmed below, then a crash becomes more likely.
Is this the calm before the storm? We may know by the end of this week. Do not take your eyes off the $BTC price.
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.