- Bitcoin fails to enter a new price discovery mode due to a rejection suffered marginally above $58,000.
- BTC risks breaking down massively amid the formation of two bearish patterns.
- Support is anticipated at $56,000, 54,000 and $52,000 to halt the declines before reaching $50,000.
Bitcoin has come very close to breaking the all-time high of around $58,330, achieved in February. However, the sellers keep missing the mark, opening the door to incoming losses. At the time of writing, BTC is trading marginally beneath $57,000 after a minor correction from the weekly highs marginally above $58,000.
If BTC completely fails to slice through the crucial hurdle, it risks forming two extremely bearish patterns; a double-top pattern and a rising wedge pattern. A double top-pattern is created after an asset rises to peak twice, separated by a trough. On failing to break past the second peak, a significant trend reversal occurs due to the resistance.
On the other hand, a rising wedge forms when an asset has significantly moved upwards. It is illustrated using two converging trendlines, running from the base of the asset’s price to the top. As the trendlines converge, a breakdown is usually anticipated. The rising wedge pattern is characterized by a reducing volume that tends to shoot up as the breakdown commences.
On the downside, Bitcoin eyes a retreat to $50,000, whereby buyers will launch another assault on the record high. The Moving Average Convergence Divergence (MACD) has slowed down the uptrend, suggesting that buyers are losing traction. If the MACD line (blue) crosses under the signal line on the 4-hour chart, we can foresee Bitcoin appreciably continuing with the breakdown.
BTC/USD 4-hour chart
Note that several support levels are in line to offer BTC support and avert the losses to $50,000. Some of these levels are highlighted at $56,000, 54,000, and the 50 Simple Moving Average (SMA), slightly under $52,000.