Bitcoin (BTC) has shown significant volatility in recent weeks, rebounds as high as 14% following a drop to a four-month low of approximately $76,600. Despite this recent uptrend, Bitcoin’s current price reflects a decline of around 25% from its all-time high of $110,000, a trend that many analysts are calling a normal aspect of a “bull market correction”.
Bearish Indicators Amidst Recovery
Notwithstanding its recent rebound, a prevailing sentiment among analysts suggests that further declines in Bitcoin’s price may be on the horizon. One notable concern comes from the technical analysis shared by GDXTrader on social media, indicating that Bitcoin has yet to overcome significant resistance at around $87,470. This resistance, framed within a “dark cloud cover” pattern, has led to renewed bearish pressure, suggesting that the cryptocurrency is signaling an impending downtrend.
BTC/USD daily price chart. Source: TradingView/@GDXTrader
The dark cloud cover pattern—characterized by a strong green candle followed by a red candle that opens higher yet closes beneath the prior candle’s midpoint—indicates a shift in market sentiment. The failure of Bitcoin to secure a close within the critical resistance zone of $90,000 to $93,000 reinforces the bearish sentiment detected by market analysts.
Examining Potential Price Floors
As we delve deeper into market dynamics, it becomes evident that Bitcoin’s recent price movements indicate risks of potential declines toward $65,000. Analysts have pointed out that BTC’s struggles in the $86,000 to $88,000 zone, typically regarded as a resistance area, exacerbate fears of further depreciation. Failure to reclaim this crucial supply zone heightens the potential for Bitcoin’s price to approach lower support levels around $77,000 to $79,000.
While historical data shows that testing these support levels has led to sharp rebounds in the past, analysts have expressed concerns that breaking this support could lead to even deeper price declines, as illustrated by charts shared by reputable traders.
BTC/USD hourly price chart. Source: TradingView/CrediBULL Crypto
The Correlation with Traditional Markets
Bitcoin’s market performance also appears to be increasingly correlated with traditional equity markets, particularly the S&P 500 and Nasdaq 100, which currently exhibit bearish patterns. This correlation can impact Bitcoin’s price trajectory, particularly as broader market sentiments fluctuate amid economic uncertainties.
BTC/USD and Nasdaq Composite 30-day correlation. Source: TradingView
As these markets face challenges, it becomes increasingly difficult to maintain a bullish outlook for Bitcoin, as external economic factors continue to exert considerable influence over the cryptocurrency’s market dynamics.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.
