Bitcoin Suckers Rally Confirmed: Bearish Reversal Locked In! This week is Critical

  • Bitcoin Suckers Rally: Retail Investors TRAPPED Bitcoin lured in retail investors at the end of June, only to crash 14% last week, dropping to approximately $54,000.
  • Bearish Reversal Pattern: Is the Worst Yet to Come? A Double Top formation, a key technical analysis pattern, has now been confirmed on the weekly Bitcoin timeframe. This week is critical as it tests the neckline.
  • What Happens Next? Market Meltdown or Recovery? Hundreds of millions have been liquidated from the crypto market over the last week, but is the drop finally over? Analysts predict the “local” bottom is in for the time being, but low liquidity within the market could prove otherwise.

Today, I’m diving deep into the technical analysis of Bitcoin, examining its current state and the key tools I’m watching for further insights on Bitcoin’s potential movements.

Bitcoin in Turmoil: What’s REALLY Going On?

First things first, let’s look at the weekly chart. This provides a clear indication, in my opinion, that there is a large potential for deep retracement. Why? On the weekly timeframe, Bitcoin has officially put in a Double Top or an M formation, a key technical analysis reversal pattern which can indicate further bearish momentum.

With most Double Tops, we see what’s called a retest of the neckline, where the price returns to what was once support to be retested as resistance. This is now in effect on the weekly timeframe. If the retest fails to break above, my next potential support levels for Bitcoin would be $54,000, $51,000, and the major level of $48,000 – $46,000. At this level, it would clear out billions in leveraged positions, as seen in the liquidation heatmap below.

Source:TradingView

Also on the weekly chart, you can see that Bitcoin has officially broken the long-standing uptrend, which had been in effect since October 2023 from $26,000—another potential sign of bearish momentum.

Advertisement

Bitcoin Daily: Is the Bottom In?

To further complement the bearish momentum on the weekly chart, one of the key indicators I use, the 200EMA (green line on the chart), on the daily timeframe, now shows Bitcoin trending below it. This means that, on average, over the last 200 days, the price of Bitcoin has declined. This key indicator also coincides with a critical level of resistance or an area of interest at $58,500.

Source:TradingView

When you consider all these elements, it’s hard to position yourself in a bullish scenario where Bitcoin magically goes to $100,000, as many YouTubers continue to shill.

The only indicators that have me questioning whether this is the bottom are the momentum indicators such as the CCI, RSI, and Stochastic, as they approach levels that saw the Bitcoin bull market begin back in October. However, I am taking this with a grain of salt since this is only one bullish indicator in my opinion and it has yet to pivot toward the upside, hinting that buying momentum is back.

Source:TradingView

I am heading off on holidays for the next three weeks, so this will be my last article until I return on August 5th. But don’t worry, you can still keep up to date with the latest Bitcoin updates and charts by heading over to the Empire Social Media and Education Platform.

Register now at the Empire Crypto Trading Social Media and Educational Platform. Stay ahead with the latest crypto charts, get FREE education, access airdrop guides, and so much more. Don’t miss out—sign up now and be part of the Empire!

At the time of writing this article, Bitcoin was trading at $57,200.

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice. The author takes no responsibility for any financial losses incurred as a result of trading or investing based on the information provided. Always conduct your own research and consult with a professional financial advisor before making any investment decisions.

Matthew Stella
Author

Matthew Stella

Matt Stella embarked on his crypto trading journey when Bitcoin was valued at just $3,000. As the co-founder and Head Coach at Empire Crypto Trading, Matt excels in Technical Analysis and in pinpointing key areas of price action. He is dedicated to empowering the crypto community through education, offering weekly Market Scans, Technical Analysis tutorials, and leading a vibrant community of crypto enthusiasts on the Empire Crypto Trading platform, where members collaborate to navigate the market. Every Tuesday, he shares his invaluable market insights with the CNA community.

You may also like