Prominent X market analyst Cryptododo7 has shared a bearish prediction on the Bitcoin market amidst an ongoing price rally. Notably, the premier cryptocurrency has moved from $75,000 to $86,000 over the past three days indicating a rising level of market demand. Despite this positive development, Cryptododo7 warns that the potential for a significant downside still exists.
In a recent post on X, Cryptododo7 shares a technical analysis of the BTC market showing the formation of a bearish pennant. Notably, this development follows a double top formation, a classic reversal signal that aligns with the downward price action observed over the past three months.
While recent market gains point to a rising bullish momentum, Cryptododo7 states that the bearish pennant formation signals much potential for a deeper price correction. The bearish pennant forms after a strong downward price move i.e. flagpole as seen when Bitcoin dropped from $96,000 to $76,000 in late February.
The pennant follows this price decline, which is just a short period of consolidation where price action forms a small symmetrical triangle. This pattern is usually marked by lower highs and higher lows bringing about two converging trendlines as seen over the last six weeks. Following this consolidation, the market price is expected to break below the lower trendline confirming the intention of a price fall.
According to Cryptododo7’s post, the lower boundary of the bearish pennant is positioned around $74,000. A decisive close below this level would validate the bearish pattern and signal a likely continuation of the downtrend, with a projected price target of $51,400.
Cryptododo7 explains that $51,400 represents Bitcoin’s strongest support level as it aligns with the 200-week moving average. Amidst the current price rally, the analyst states that a retest to this support level is largely reasonable, especially considering ongoing macroeconomic developments.
In other developments, crypto analyst Ali Martinez reports that 56.18% of Binance traders have opened short positions on Bitcoin, indicating that a majority of traders on the world’s largest exchange are predicting a price decline despite Bitcoin’s recent upward momentum. This development aligns with Cryptododo7’s bearish warning as a large volume of traders still hold a negative market outlook amidst recent gains.
At the time of writing, Bitcoin trades at $85,416 following a 2.50% gain in the past 24 hours. Meanwhile, the daily trading volume is down by 40.07% and valued at $25.10 billion.
Featured image from Pexels, chart from Tradingview
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