The frequency with which Bitcoin fails to break through higher resistance levels could lead to the formation of a “double top price pattern,” potentially leading to a “sharp decline” to $50,000, according to a cryptocurrency analyst.
Markus Thielen, founder of 10x Research, explained in an analyst note on June 24 that Bitcoin (BTC) technically appears to be following a double top pattern and is currently testing support levels.
A double top pattern is formed when the price reaches two similar highs with a slight decline in between them, holding support above a common line known as the “neckline”. This pattern usually resolves when the price falls below the neckline, potentially by the distance between the high and the neckline.
“Bitcoin could shift to forming a high in its current range (60,000-70,000), potentially leading to a steeper decline.”
“This chart configuration should become our default practice unless it is invalidated. This formation could easily lead to a decline to $50,000, if not $45,000,” Thielen said. “As we have observed over the past three months, range trading is a complex phase that is often marked by multiple false breakouts.”
“Topping formations have historically left ordinary retail investors vulnerable, with many altcoins experiencing significant declines.”
Thielen added that despite the potential positive impact of the US election and the Consumer Price Index (CPI) later this year, prices could still see a “steep correction”.
Prominent cryptocurrency traders are speculating on the price of Bitcoin after the halving on April 20. This event resulted in a 50% decrease in Bitcoin miner block rewards from 6.25 BTC to 3.125 BTC.
Crypto trader Jelle said Bitcoin’s price action is still “similar” to the aftermath of the 2016 halving and is “breaking previous cycle highs.”
“At current prices, more and more falsehoods are being dissipated,” Jelle said in a June 24 X post, adding that this was part of the “substitution effect.”
“It’s either very over, or close to the bottom.”
Cryptocurrency trader Rekt Capital believes there is significant potential for further upside in the near term. He said in a June 24 post that the company’s “bull market” phase had reached about 40% market share.
This means that the recent drop in BTC price below $60,000 gives buyers an opportunity to buy more on the downside before Bitcoin enters a “parabolic uptrend.”
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.