Will Bitcoin crash to $46,000 in the short term? Analyst warns of bearish trend reversal
Bitcoin bulls should prepare for a shock as a confluence of technical indicators is poised to send the cryptocurrency price to $46,000.
According to independent market analyst Jonny Moe, the BTC/USD price is at risk of falling to the said level as it drops below the price bottoms of two classic technical patterns: double top and descending triangle. This increases the likelihood that it will extend its downward correction – based on how Bitcoin Profit traders interpret classic technical indicators.
Looking back, Bitcoin confirmed a double-top pattern after hitting two consecutive highs, with a moderate decline between the two highs. The decline below the level of the double-top neckline indicated further potential selling, with a price target down to the level of the double-top.
This would put Bitcoin (to buy Bitcoin at eToro guide) roughly on track for $46,000, explains Mr Moe.
Meanwhile, Bitcoin showed signs of breaking out of a Descending Triangle pattern. Moe comments that traders could see the breakout of the triangle as an additional signal to prepare their positions towards $46,000.
„Call it a double top, call it a descending triangle, but either way, I’m still targeting the $46k region on a breakout,“ the analyst said. And:
„We have broken out of the double top, but we have at least caught initial support at the $52k horizontal level. I will take my own advice and step back to see how we react.“
More downside risks for bitcoin
Downside risks in the bitcoin market also arose from a potential falling wedge, a bullish reversal pattern, but one that is currently in the middle of its formation. Market analyst Vince Prince spotted the structure in his Wednesday analysis, noting that Bitcoin (user record!) could be heading for the point where the upper and lower trendlines of the wedge converge.
The point of convergence of the trendlines is in the $50,000-51,000 range. Bitcoin is likely to fall into this before attempting a bullish breakout.
In the meantime, any further decline for the cryptocurrency could see traders eyeing the same $46,000 area as the next downside target.
„Now, that doesn’t mean bitcoin is completely bearish,“ Prince adds. ‚It will be important how the cryptocurrency approaches the lower supports and how it manages a possible bounce from there. If that bounce is strong enough, it can lead to further stabilisation and also a possible reversal.“