Bitcoin’s recovery has not been as impactful as expected, as it has failed to break above $60,000 even after the bullish momentum returned. Given this, expectations of a bearish reversal have become common as analysts believe the pioneering cryptocurrency lacks the momentum to sustain its current momentum. One analyst who believes the price will fall is Finn Oakes, who predicts a return to the $53,000 area.
Bitcoin Forms Double Top Pattern
In an analysis shared on the TradingView website, crypto analyst Finn Oakes explains that the Bitcoin price has now formed a double top. This occurred after the Bitcoin price broke the $59,000 level twice, and both times the price failed to successfully break this level.
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This double top pattern is visible on the 4-hour chart, and it forms a reversal pattern. This double top is bearish for the price and may indicate that the downtrend that started last week may continue. In that case, the bulls will have a tough fight ahead.
The crypto analyst who analyzed the double top now explains that $59,000 has shown to be a strong resistance zone, meaning that the price must successfully overcome this resistance to confirm a rally.
In contrast to the resistance level, $56,000 has now emerged as a support level for Bitcoin price. This provides a narrow space for both bulls and bears to fight for dominance and push the price in either direction, otherwise the sideways movement may continue.
Goals for reduction
As a double top is formed on the 4-hour chart, the cryptocurrency analyst expects the price to drop once again. In the first scenario, where Bitcoin price falls below the $56,000 support level, the cryptocurrency analyst expects a drop to the $53,000 level.
But if the downtrend doesn’t stop, it doesn’t end exactly there. In this case, the chart shows the price dropping below the $53,000 level and moving towards $52,000. However, this seems to be the worst-case scenario, contrary to the expected target.
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Additionally, as volume increases during the downtrend, the analyst believes this indicates more selling is happening in the background, which could be contributing to the price decline. “The volume has increased during the recent downtrend, indicating strong selling pressure, which reinforces the current downtrend,” Oakes said.
At the time of writing, the Bitcoin price is struggling to hold the $58,000 level. However, it is still up 1.08% over the past day, according to data from Coinmarketcap.
Featured image made with Dall.E, charts from Tradingview.com