A widely followed crypto analyst is issuing a warning to traders saying that Bitcoin’s (BTC) downtrend is not over after displaying a bearish signal.
Crypto trader Ali Martinez tells his 30,900 followers on the social media platform X that the king crypto appears to be forming a classic bearish flag pattern.
Bearish flag patterns are used in technical analysis to forecast abrupt moves to the downside. They are formed when price consolidates upwards after a strong downtrend, but fails to break a key support level.
“Bitcoin seems to be shaping a bear flag – a classic chart pattern that often signals a continuation of the BTC downtrend.
The silver lining? A tight stop loss of only 0.86% with a potential take profit near 5%.”
The trader’s chart indicates that the flag pattern will materialize if Bitcoin fails to flip support around the $28,034 level, causing it to dip down to $26,751.
The trader also says that a Bitcoin dip is further supported by the top crypto asset by market cap’s Relative Strength Index (RSI), a widely used momentum indicator that aims to determine if an asset is overbought or oversold.
“Notice that each time the RSI on BTC four-hour chart hits or surpasses 74.21, BTC tends to retrace. The RSI on the four-hour chart recently hit 82.83!”
The RSI indicator scales from 0 to 100. A reading of below 30 is typically considered bullish while a reading of over 70 is typically considered to be a bearish sign.
Bitcoin is trading for $27,568 at time of writing, up 0.6% in the last 24 hours.
The trader also weighs in on Ethereum (ETH) and says that the second largest crypto asset by market cap is setting the stage for a bullish reve
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Author: Daily Hodl Staff
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