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

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.

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

Source-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

Source-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.

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.

Bitcoin Price Intraday Levels

• Spot rate: $17009
• Trend: Bearish
• Volatility: Low
• Resistance levels- $18400 and $19500
• Support levels- $16800 and $16200