As Bitcoin and the rest of the crypto market observe a recovery campaign from the recent drop, some analysts warn there might be further downturn.
Ali Martinez, an expert analyst on X, recently highlighted a bearish pattern in Bitcoin’s short-term price action. According to him, on the daily chart, Bitcoin is forming a rising wedge, a pattern often linked to downtrends.
Although Bitcoin might climb to $57,000 at the wedge’s upper boundary, there is a potential breakdown that could pull it back to around $51,000. This observation raises important considerations for Bitcoin’s immediate future.
Bitcoin Rising Wedge Pattern
A rising wedge is a bearish continuation pattern that often appears during uptrends. This pattern is characterized by converging trend lines where both the support and resistance lines slope upward.
Such convergence reflects diminishing upward momentum and often precedes a reversal to the downside.
Currently, Bitcoin’s price action on Ali’s chart illustrates this pattern. The price might climb toward the upper boundary of the wedge, ranging between $56,000 and $57,000. A breakdown below the rising support line could signify a trend reversal, potentially leading the price towards $51,000.
Technical Indicators Highlight Bearish Sentiment
Technical indicators on the daily chart support this bearish sentiment. The Bollinger Bands indicate widening volatility, with the price near the lower band, suggesting potential oversold conditions.
The Relative Strength Index (RSI) is at 30.04, placing Bitcoin in the oversold territory (below 40). This suggests the asset is potentially undervalued in the short term. Further, the Accumulation/Distribution (Acc/Dist) line shows a slight decline, indicating more distribution (selling pressure) than accumulation (buying pressure) over the recent period, with a current value of 4.619M.
Long-Term Analysts See Potential for Growth
Despite the short-term bearish outlook, some analysts maintain a long-term bullish perspective. Expert chartist Peter Brandt recently highlighted Bitcoin’s potential for further growth. In a recent chart, Brandt used an 8-period moving average to track short-term trends.
Bitcoin experienced a strong surge in Q1, establishing bullish sentiment. Although this was followed by fluctuations, Bitcoin showed resilience by recovering after each setback and edging closer to previous highs.
Brandt’s analysis suggests that while Bitcoin may face short-term bearish pressures, the longer-term outlook remains positive.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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