Nine weeks in the making, the Bitcoin bear flag may now have broken down, and Bitcoin could be on the way to $70,000 or perhaps even lower. Is there any hope left, or is the bear market about to clamp its icy tendrils around the crypto sector?
Bounce about to run out of steam?
Source: TradingView
A plunge out of the bear flag (purple lines) and down to $86,000 could be the beginning of the next leg down for the $BTC price. There was a bounce from $86,000, but the chances are that this might only take the price back to the bottom of the bear flag in order to confirm the breakdown.
As can be seen in the short-term chart above, the price fell out of a small bear pennant, and once it had broken down through $88,000, downward acceleration rapidly took the price to the $86,000 local bottom.
Currently, the bulls are trying to lift the price back above the $88,000 resistance. They might be successful, but with the Stochastic RSI indicators heading to the top, this bounce could run out of steam either here, or at the bottom of the bear flag, and a resumption of downside momentum could take place from there.
Next stop: $80,000?
Source: TradingView
Moving out into the daily time frame one can observe that the price has fallen under the 50-day SMA once again. Unless this can be regained, and also the bear flag, the next big drop seems unavoidable.
If one takes just the measured move out of the ascending channel, this would take the $BTC price down to around $79,400, while the same for the bear pennant also brings the price down below $80,000. Looking across to the last local low at $80,000, this could end up forming a double bottom.
Is $53,000 a potential bottom?
Source: TradingView
While being aware of the pain this might cause to Bitcoin holders, the measured move out of the bear flag has to be taken into consideration. Measuring from the all-time high at $126,000, down to the bottom of the flag, and then taking that measurement from the last touch of the top of the flag, the result is a spine-chilling $53,000.
Looking left along that $53,000 horizontal line it can be seen that this is support for the 8-month bull flag that formed in 2024, so there is structure there. Be that as it may, falling below the $69,000 support level of the last bull market top would be an extremely bitter pill for the bulls to swallow, considering the amount of time it took to break through in the first place.
There is last-ditch support from the 100-week SMA, but if this breaks and is confirmed below, the next leg down could take place quickly.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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