Bitcoin Price Breakouts Of This Repetitive Bearish Pattern; More Downfall Ahead?

Bitcoin is poised for longer correction as it completes the inverted flag pattern; how far may this downfall plunge the price?
By Brian Bollinger
Dormant Bitcoin addresses back to life

The Bitcoin price shows the formation of an inverted flag pattern in the daily time frame chart. This pattern consists of a sharp downfall, followed by a minor bullish recovery between two trendlines. Moreover, a breakdown from the pattern’s support trendline signals the replenished bearish momentum, which tends to resume the prevailing downfall.

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Key points:

  • With a 2.3% intraday fall, the Bitcoin price breached the support trendline of the inverted flag pattern. 
  • The pattern breakdown sets the coin price for an 8.5% fall
  • The intraday trading volume in Bitcoin is $22.3 Billion, indicating a 14.2% loss

Bitcoin PriceSource-Tradingview

Bitcoin’s daily chart has shown the inverted flag pattern several times, and it all led to a deeper correction in its price. The above chart shows this bearish continuation pattern was observed from Jan 2020 to April, then from May to June, from late June to mid-Aug, and from late November to the current time.

Moreover, with the mining industry suffering from losses with constant downfall, Bitcoin could face further negativity. According to a recent report, the average cost for mining one bitcoin reached $19,463 on December 15th, and by the press time, it’s currently trading at $170009

Bitcoin PriceSource-Tradingview

On December 14th, the daily chart showed a long higher price rejection candle, indicating the sellers are defending the higher price aggressively. The following downfall registered a 4% loss in the last two days and breached the Flag pattern’s support trendline.

The daily candle closing below the trendline will signal the pattern completion and the likelihood of a deeper correction. With sustained selling, the Bitcoin price will drop 8.5% lower to revisit $15600 support.

However, the $16800 and $16125 are significant support levels where buyers could wrestle for trend control.

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Technical Indicator

RSI: the RSI indicator reflects the strength of the coin’s recent price behavior. Thus, with the recent downfall, the RSI breached the midline and 20-SMA, indicating weak bullish momentum.

EMAs: the Bitcoin price nosedived below the 20-and-50-day EMA, offering an additional edge for short selling.

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Bitcoin Price Intraday Levels

  • Spot rate: $17009
  • Trend: Bearish
  • Volatility: Low
  • Resistance levels- $18400 and $19500
  • Support levels- $16800 and $16200
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Brian Bollinger
From the past 5 years I am working in Journalism. I follow the Blockchain & Cryptocurrency from last 3 years. I have written on a variety of different topics including fashion, beauty, entertainment, and finance. Reach out to me at brian (at) coingape.com
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