The Bitcoin recovery was not as impactful as expected, failing to break the $60,000 mark even after a return of bullish momentum. Given all this, expectations of a bearish reversal have become the norm as analysts do not believe the pioneer cryptocurrency has enough strength to maintain current momentum. One of the analysts who believes the price is destined for a downturn is Finn Oakes, who predicts a return to the $53,000 area.
Bitcoin forms a double top pattern
This was the case in the analysis shared On the TradingView website, crypto analyst Finn Oakes explains that the Bitcoin price has now formed a double top. This happened after the Bitcoin price crossed the $59,000 level twice and both times the price failed to reach this level successfully.
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This double top pattern appears on the 4-hour chart, where a reversal pattern forms as a result. This double top is bearish for the price and could mark a continuation of the downtrend that started last week. In such a case, the bulls are in for a tough battle.
Upon breaking the double top, the crypto analyst explains that $59,000 is now a strong resistance zone. This means that if a rally were to occur, price would have to successfully beat this resistance before it is confirmed.
Contrary to the resistance level, $56,000 has now emerged as support for the Bitcoin price. This gives both bulls and bears a tight $3,000 space to fight for dominance and push the price higher anyway. Otherwise the sideways movement could continue.
Target For The Fall
Given the formation of the double top on the 4-hour chart, the crypto analyst expects the price to fall again. For the first scenario, in which the Bitcoin price falls below the $56,000 support, the crypto analyst expects a downtrend towards the $53,000 level.
However, it doesn’t exactly end there if the downtrend is not stopped. In this case, the chart shows the price falling below the $53,000 level and moving towards $52,000. Although this seems like a worst case scenario, as opposed to an expected goal.
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Furthermore, given the increasing volume during the downtrend, the analyst believes that this indicates that there is more selling happening in the background, something that could contribute to the price decline. “Trading volume has increased in recent days, indicating strong selling pressure. This reinforces the current downward trend,” Oakes said.
At the time of writing, Bitcoin price is struggling to hold the $58,000 level. However, according to data from Coinmarketcap, there is still a gain of 1.08% over the past day.
Featured image created with Dall.E, chart from Tradingview.com