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Home » Crypto Technical Analysis » Bitcoin May Dip to ,600: Analyst Warns of Bearish Trend

Bitcoin May Dip to $40,600: Analyst Warns of Bearish Trend

  • September 5, 2024
  • 137

An analyst has identified a potential downward trend for Bitcoin , suggesting it could fall to the $40,600 level based on recent patterns observed in its two-month price chart. The analysis revolves around a signal from the Tom Demark (TD) Sequential, a tool in technical analysis designed to identify potential reversal points in asset prices.

The TD Sequential operates in two distinct phases: the setup and the countdown. During the setup, the indicator counts candles of the same color — either green or red — up to nine. Upon completing this count, if the setup consists of nine green candles, it typically signals a peak, while nine red candles may indicate a bottom. Once the setup phase concludes, the countdown phase begins, extending the count to thirteen candles, which also signifies possible market tops and bottoms.

Recently, Bitcoin ’s price action completed a TD Sequential setup characterized by nine consecutive green candles, suggesting that the cryptocurrency might have hit a peak. Following the appearance of this signal, Bitcoin ’s price has fallen below the $57,000 threshold. This decline raises concerns that the bearish influence of the pattern may already be in effect.

Currently, a crucial support level is identified at $51,000, corresponding to the 0.236 Fibonacci Retracement level based on Bitcoin ’s recent price peak. Fibonacci Retracement levels derive from the Fibonacci series, where specific ratios provide insights into potential price retracements. If Bitcoin fails to hold above the $51,000 level, it may plunge further down to $40,600, alongside the 0.382 Fibonacci Retracement level.

Should Bitcoin reach this lower level, it would represent a significant drop of more than 28% from its current value. Observers will be closely monitoring Bitcoin ’s price movement to see how this situation unfolds, especially after it slid to $56,600 in recent trading.

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