A closely followed analyst is warning that Bitcoin (BTC) is forming a bearish pattern last seen just before the crypto king collapsed in late 2021.
Pseudonymous analyst Rekt Capital tells his 350,800 followers on the social media platform X that Bitcoin is very close to breaking down from a bearish double top pattern.
According to the crypto strategist, a sell-off event with increased volume would ignite the breakdown process.
“BTC is on the cusp of validating its double top formation.
A breakout on seller volume and a convincing loss of ~$26,000 followed by turning it into new resistance would confirm the breakdown.”
Zooming out, Rekt Capital says that Bitcoin appears to be mirroring its late 2021 price action when BTC ended its last bull market after breaking down from a double top pattern.
“In 2021, BTC formed two clear tops akin to a double top before forming the third top at a lower high.
Right now, it looks like BTC has once again formed two clear tops, akin to a double top, with a potential third top forming at a lower high.”
Rekt Capital says that the similarities extend beyond BTC’s price action. The crypto strategist highlights that key moving averages are now acting as resistance for BTC just like in 2021.
“Because BTC is experiencing resistance at the bull market moving averages which are located around ~$27,000-$28,000.
These BTC moving averages are the green 21-week EMA (exponential moving average) and the blue 50-week EMA.
They are acting as resistance, much like they did in 2021.”
The analyst goes on to say that he expects Bitcoin to bounce one more time before breaking down and witnessing a deep corrective move close to the $20,000 price area.
“The BTC 2021 fractal suggests BTC could soon form its third top at a lower high before rejecting there and finally losing ~$26,000 support.
After that, the fractal suggests that BTC would bounce but only to turn ~$26,000 into new resistance before rejecting lower.”
At time of writing, Bitcoin is worth $25,850.
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