Bitcoin Flirts with Lows: Can $60K Support Hold or Is Breakdown Coming?

With a seemingly unstaunchable flow of BTC leaving the U.S. Spot Bitcoin ETFs and a shaky U.S. stock market making its impact felt, how long will it be before the Bitcoin price breaks down again? Could the $BTC price close below the $60K support?

A more realistic bear flag materialising?

Source: TradingView

The 4-hour chart for $BTC shows that the price broke down out of the ascending channel/bear flag and has descended to just hover above the bull market support trendline.

Yesterday’s article discussed whether this channel was actually a bear flag, given that the angle did perhaps incline a bit too far. Now on Wednesday the price action has developed and we can see that a less inclined bear flag could be materialising (faint dotted-line channel). This more classic-looking bear flag (if it is one) could have serious consequences for the $BTC price if it breaks down. The full measured move out of the flag could take the price down to $49K.

3 potential scenarios 

Source: TradingView

There are 3 general scenarios for the $BTC price. The bullish scenario is that a W bottom pattern forms, which takes the price back up, perhaps into the low $70K area. The bearish scenario is that the price falls down from here and holds below the bull market support trendline, with further downside price action to follow.

The third scenario is also bearish, but it involves more time in playing out. This can be seen in the chart above, where the $BTC price goes sideways from here in a bear flag structure before finally breaking down below $50K and a potential retest of the bear market trendline. 

This could take the timeline out to July, after which 3 months or so of grinding out a bottom could then lead into the first green shoots of the next bull market.

Bear market trendline confirmation to signal a bottom 

Source: TradingView

At first glance, the $BTC price would appear to be based on good support in the weekly time frame. However, a closer look reveals that the price is now actually holding below the 200-week SMA. We are still not even halfway through the week, so this can certainly change, but will it be for the better or worse at the end of this week?

The collapse out of the bear flag almost took the price down to retest the bear market trendline. Could the price go sideways for 2, 3 weeks, or more, before the next leg down, and could this be the time when the bear market trendline is finally tagged and confirmed? 

The bear market is in its last stage. It’s just a matter of time.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.