Prominent market analyst Cryptododo7 has issued a bearish prediction regarding the Bitcoin market amidst a notable price rally. The leading cryptocurrency has surged from $75,000 to $86,000 over the past three days, a move that signals increasing market demand. However, despite these positive developments, Cryptododo7 cautions that there remains a considerable risk for a significant price downside.
Bitcoin Completes Bearish Pennant Formation – Price Fall To Follow?
In a recent post on X, Cryptododo7 provided a technical analysis of the Bitcoin market, indicating the formation of a bearish pennant. This formation follows a double top configuration, a classic reversal signal that aligns with the downward price action observed over the last three months.
Although recent market gains suggest a bullish trend, Cryptododo7 warns that the bearish pennant indicates a potential for a deeper price correction. The bearish pennant typically appears after a strong downward movement in price, identified as the flagpole; this was evident when Bitcoin dropped from $96,000 to $76,000 in late February.
Post this price decline, the pennant forms as a short-term consolidation pattern where price actions create a small symmetrical triangle. This formation is characterized by lowering highs and rising lows, resulting in two converging trendlines. Following this consolidation phase, it is anticipated that the market price will breach the lower trendline, confirming a likely price fall.
Cryptododo7’s analysis identifies the lower boundary of the bearish pennant around $74,000. A definitive close below this level would validate the bearish pattern and suggest a continuation of the downtrend, targeting a projected price of $51,400.
This projection aligns Bitcoin’s strongest support level with the 200-week moving average. Given the current price rally, the analyst believes a retest of this support level is reasonable, particularly in light of ongoing macroeconomic factors.
Bitcoin Faces Short Pressure From Binance Traders
In related news, crypto analyst Ali Martinez reports that 56.18% of traders on Binance have opened short positions on Bitcoin. This indicates that a majority of traders on the largest exchange are predicting a price decline, despite Bitcoin’s recent upward movements. This sentiment aligns with Cryptododo7’s bearish forecast, as a significant number of traders maintain a negative outlook amidst the recent gains.
As of this writing, Bitcoin is trading at $85,416 following a 2.50% gain in the past 24 hours. However, it’s noteworthy that the daily trading volume has decreased by 40.07%, amounting to $25.10 billion.
Featured image from Pexels, chart from Tradingview
