Bitcoin Price Prediction: the formation of a double bottom pattern indicates an upcoming correction in BTC
On December 22nd, the Bitcoin price witnessed a bearish reversal from $44500 resistance which led to a 4.5% drop within a week. This is the second time in a month, the coin price has reverted from this level, projecting a presence of high supply pressure. A look at the daily time frame shows these downswings as the formation of a bearish reversal pattern called double top.
Is Bitcoin Price Heading Back to $40000?
The BTC price breakdown below $40280 neckline support could encourage a correction phase.
The falling coin price may find suitable support at $38000 and $35500.
The intraday trading volume in Bitcoin is $26.5 Billion, indicating a 20% gain.
In December, the largest cryptocurrency Bitcoin traded majorly sideways, resonating between the horizontal levels of $44500 and $40280. Amid this consolidation, the price swing did not contribute to a particular direction creating an uncertain sentiment in the market.
However, the BTC price struggle to surpass $44500 has led to the formation of a double bottom pattern, which often formed at the local top in a rally. By the press time, this coin trades at $42352 with an intraday loss of 3.25%
Under the influence of this pattern, the $BTC price is likely to break $40280 and end the consolidation in a bearish note to intensify selling pressure, the post-breakdown fall may push the coin value 12% down to hit $36000-$35500 support zone.
Is BTC Price Ready For a Bull Run
While the short-term outlook for Bitcoin seems bearish, the Fibonacci retracement tool indicates the broader trend remains bullish. The BTC price potential drop to $35500 may also hit the 50% FIB level, which offers an additional layer of support for buyers. Moreover, a retracement to such a degree is often interpreted as a healthy retracement as buyers revive the exhausted buying momentum.
In addition, the Securities and Exchange Commission (SEC) has recently instructed ETF applicants to finalize revisions to their proposals by December 29, 2023, signaling a potential advancement toward approval. Thus, the possibility of a spot Bitcoin exchange-traded fund (ETF) gaining approval in the United States and bullish sentiment in the market.
Exponential Moving Average: The ETH price breaking below the 20-day EMA slope would be an early signal of upcoming correction.
Moving Average Convergence Divergence: The MACD and the signal line in a bearish crossover state indicate a correction trend is active. Source Coingape