The pennant’s technical target is derived by projecting the height of the prior flagpole (the sharp drop preceding the consolidation) downward from the breakout point. Based on this calculation, Bitcoin risks a further decline toward the $85,600 level, coinciding with a major support zone from late 2022.
Several bearish indicators align with the pennant breakdown. For instance, Bitcoin remains below its 50- and 200-period exponential moving averages (EMAs), which act as dynamic resistance levels.
The 50-EMA has also recently crossed below the 200-EMA, forming a “death cross,” a classic bearish signal that typically predicts continued downside momentum.
Conversely, Bitcoin’s Relative Strength Index (RSI) on the 4-hour chart has dropped below 30, entering oversold territory. This suggests that the current downside momentum may be overstretched, potentially paving the way for a short-term relief rally.
Key levels to watch on the upside include the $92,000-$94,000 range, where the pennant’s former support line and the 50-EMA could now act as resistance. A reclaim of this zone would indicate a weakening bearish momentum.
ETH Price Could Drop Toward $2,760
Ethereum is following Bitcoin’s lead on Jan. 13, breaking below the lower trendline of its bear pennant pattern on the 4-hour chart. The bearish continuation setup formed after ETH’s sharp decline earlier this month, and the subsequent breakdown suggests the potential for further downside.
