Does Bitcoin Have Further To Fall? Watch This Pattern
Several weeks ago, I wrote about a chart pattern forming in Bitcoin BTC and other cryptocurrencies that indicated that a sharp move was likely ahead. Since then, Bitcoin has fallen sharply after the FTX cryptocurrency exchange experienced a liquidity crisis and filed for Chapter 11 bankruptcy protection. Bitcoin has broken below its descending triangle pattern on heavy volume, which is a bearish sign. Interestingly, another pattern has been forming in the past week called a pennant, which is typically a continuation pattern. If Bitcoin’s pennant pattern breaks down on high volume, even further declines are likely.
The chart below shows the pennant pattern on Bitcoin’s daily chart:
The chart below shows the pennant pattern on Bitcoin’s hourly chart:
Bitcoin’s weekly chart shows the recent breakdown from the descending triangle and the next support level of $10,000, which should act as a price target if the crypto bear market continues:
A similar pennant pattern in forming in Ethereum on the daily chart:
Ethereum’s hourly chart shows the pennant in greater detail:
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For now, I am waiting to see if Bitcoin and Ethereum will break down from their pennant patterns with heavy volume for confirmation. If a breakdown occurs, it will likely signal that another wave of the crypto winter or crypto bear market is ahead. Such a breakdown would likely coincide with additional scandals in the crypto world along with a serious loss of confidence as investors and traders jettison cryptocurrencies and related investments.
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