Bitcoin (BTC) has been in a narrow range since declining from the all-time high and finding support near the last major support area, around $35000. There has not been a lot of movement in BTC price since.
On the weekly chart, the last two high peaks (i.e., prices during April-May 21 and the next at Nov 21) seem to be forming a potential double top formation. This is a relatively common price reversal pattern which, next to the Head and Shoulders reversal pattern, is the most frequently seen on price charts.
BTC price advanced towards the first peak with relatively heavier volume as compared to the volume seen on the next advance or bull run, which surpassed the last high but failed to penetrate the previous peak on a closing basis of the weekly chart.
The consolidating price now has to break and hold below the neckline at $28800 to complete the pattern and finally fall onto the bearish side. If this happens, Bitcoin investors might have to face substantial losses on their long positions as BTC could fall significantly towards its crucial support as per the Bitcoin prediction.
On the daily chart, the 100-period moving average is moving below the price, and recently, the BTC price got tested but couldn’t close above the high of $42209, which was a rejection for the upliftment of the price of Bitcoin and a path towards the deterioration of the coin.
The RSI indicator is currently 45 and is neutral but seems to head towards the oversold zone from where it may turn around in the long run. The MACD and the signal line are currently intersecting each other, thus not clearly indicating an upcoming price momentum but rather a consolidation phase that the market needs to break out of.
Investors planning to open fresh longer-term positions should sit tight till the BTC prices break out of the $42000 area, after which we might be able to see good buying on the counter, and prices may appreciate well over time. There should be cause for concern, though, if there is no upward breakout and prices seep through the neckline of the potential double top on the weekly. There could be a deep bear market ahead.
