The Bitcoin price experienced a bearish breakdown on May 8th, as it broke through the support trendline of a symmetrical triangle pattern. This development followed a consolidation phase that lasted for over three weeks, which only served to amplify the selling momentum in the market. This leaves many wondering just how long the BTC price will continue to correct under the influence of this pattern.
The Bitcoin Fear & Greed Index, which reflects trader sentiment, plunged to 52%, indicating an increasing level of fear among market participants. Furthermore, the $25,000 support level is viewed as a crucial accumulation phase for investors. At the same time, the intraday trading volume in Bitcoin stands at $15.3 billion, representing a 5.43% loss.
In an ideal scenario, the Bitcoin price would be poised for a 13.5% drop, reaching the $24,600 mark. However, this potential downfall may encounter significant support at a 4.2% down level of $27,000, or a 10% down level of $25,200.
Conversely, the Bitcoin price has experienced a 2% intraday increase, currently trading at $28,242. This sudden uptick is likely related to the lower-than-expected annual U.S. CPI data for April 2023. As a result, the price is now retesting the breached support trendline, in an attempt to determine the extent of its sustainability following the breakdown.
If sellers succeed in maintaining their position below the flipped trendline, Bitcoin is likely to reach the previously mentioned targets. On the other hand, buyers will need to breach both the triangle pattern’s support and resistance trendlines to regain control of the market trend.
Taking a closer look at technical indicators, the 20-day Exponential Moving Average (EMA) acts as a dynamic resistance, hindering the efforts of buyers to reach higher levels. Meanwhile, the Relative Strength Index (RSI) fluctuates below the midline, indicating that sellers currently have the upper hand.
Key intraday levels for Bitcoin include a spot rate of $28,178, with bullish trends and medium volatility. Resistance levels are set at $31,200 and $34,600, while support levels are placed at $27,000 and $25,000.
The ever-changing nature of the cryptocurrency market requires investors to conduct thorough market research before making any investments. It is essential to recognize that the presented content, which includes the personal opinion of the author, is subject to market conditions and should not be considered as financial advice.
Source: Coingape
