On May 29th, the Bitcoin price experienced a downturn after encountering resistance at the channel pattern trendline. This development suggests that the price of Bitcoin is on a corrective path, which could cause it to drop below the $26,000 monthly low. The current pattern’s impact on Bitcoin’s future trend is something to watch out for.
Typically, when a bearish reversal occurs at the resistance trendline of a channel pattern, the selling momentum can cause the price to fall back to the pattern’s lower trendline. Should Bitcoin break below the $27,500-$27,300 support zone, it could increase the selling pressure and extend the current decline.
The intraday trading volume for Bitcoin has been reported at $15.5 billion, showing a 19% gain. However, despite this, the cryptocurrency registered a 2.22% intraday loss, breaching the crucial support zone between $27,500 and $27,300. Buyers were able to reclaim this level only to see it break down again, indicating that market participants are continuing to sell during price rallies.
If the daily candle closes below the $27,300 level, traders may have a chance to short-sell and capitalize on the increased selling pressure in the market. In turn, this could push Bitcoin’s price towards $24,500, creating a new lower low in the ongoing downtrend.
Nonetheless, it’s crucial to consider that if Bitcoin were to break decisively above the channel pattern’s trendline, it could weaken the bearish momentum and potentially ignite a recovery rally. According to theories surrounding channel patterns, a bearish reversal from a resistance trendline is most likely to trigger a decline to $25,000. Therefore, if the selling pressure persists, Bitcoin’s price could collapse further below the $26,000 and $25,200 support levels and could reach the lower trendline near $24,600.
Contributing to the bearish outlook is the Directional Moving Index, which shows the DI- slope (orange) crossing above the D+ slope (blue), suggesting bearish market sentiment. Moreover, as Bitcoin loses support at the $27,300 level, buyers have also lost the 20-and-50-day Exponential Moving Averages, providing an additional advantage to short-sellers.
It’s essential to emphasize that the content presented here, including the author’s personal opinions, is subject to market conditions. Always conduct thorough market research before investing in cryptocurrencies, as neither the author nor the publication holds any responsibility for personal financial loss.
Source: Coingape
