Frightening Pattern in Bitcoin: A Further 20% Drop Possible! Here Are the Details
Although Bitcoin ($BTC) has recovered after falling to $60,000 in recent weeks, the risk of a further decline still remains.
One analyst notes that the data points to a short-term downside risk for Bitcoin.
According to market analyst Yashu Gola, considering both technical indicators and on-chain data, Bitcoin faces short-term downside risks.
First, it was noted that Bitcoin’s daily chart formed a classic bearish flag pattern. This bearish flag pattern makes it possible for the $BTC price to fall towards $56,000.
According to the analyst, this formation began to develop after a sharp drop to the $60,000 region (“flagpole”). It forms when the price consolidates within converging trend lines following this sharp decline, and usually culminates in another downward move roughly coinciding with the initial drop.
A clear break below the lower boundary of the flag pattern could push Bitcoin down approximately 20% from its current levels in February, to as low as $56,000.
Conversely, if a breakout occurs above the upper trend line at $72,700, it could invalidate the bearish pattern.
The analyst notes that, in addition to this pattern, on-chain data also reinforces the downward trend.
According to CryptoQuant data, Bitcoin’s whale inflow rate (seven-day average) has risen to a record high of 0.619, compared to 0.40 at the beginning of the month. An increase in this metric typically indicates increased whale selling pressure.
*This is not investment advice.
