The $BTC price is firmly in the grip of the bears. A triangle breakdown points to a dip below the last local low at $60,000. Will the price go there, or has the price come down too fast? Could some kind of relief rally emerge from here?
Breakdown under $60,000 or short-term relief rally?
Source: TradingView
The first thing that needs to be acknowledged when looking at any possibility of a relief rally is that the $BTC price is still very much in a bear market. Yes, the price has come down extremely fast, and that is why we are seeing this current period of consolidation. The good thing, at least as far as the bulls are concerned, is that the price action is not forming another bear flag. That said, we do have a pennant, from which the price has already fallen out of. Will the price now dip the extent of the measured move from this pattern, taking it to below $60,000?
If this happens, it will be very bearish, and another sizable leg down could follow. However, the price has already come down a large amount, and that in a very short amount of time. Price does not generally go straight up or down without any reversals on the way. Therefore, the current sideways consolidation may be an opportunity for the bulls to stage a short-term relief rally.
This rally could take the price back to around $80,000. There is also a CME gap at $84,600 which might even be a target for the market makers before they pull the rug again.
A resumption of the downward trajectory?
Source: TradingView
Looking further out into the daily time frame the bearish bias does look even more apparent. This could be a bear pennant and the $BTC price could be in the process of confirming the breakdown and resuming its downward trajectory.
That being said, only two touches at the top of the triangle does not give it full validity. It could be that a local bottom is forming and that this could be the base for the possible relief rally.
Bear market not deep enough?
Source: TradingView
The weekly chart shows the two big legs down so far in the $BTC price. Could there be one more leg down to come? This is obviously looking further out than the potential relief rally that has been mentioned. In the grand scheme of things, in line with previous bear markets, 52% is perhaps not enough of a correction.
If the price comes down to $53,000, the full measured move out of the bear flag, that would be a 58% correction. The next market structure step down from there would be to around $40,000, and a 66% reversal. This is more within the realm of previous bear markets.
And then, to be completely unified with what has happened in bear market history, a total rout down to $30,000 would put the total correction at 75%. One of these aforementioned targets could be the one – which might it be?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Laurie Dunn
