Bitcoin has now tracked as much as $ 11,000, 27% from its high in 2021, and while the current high may not be the top for this bull run, it could steer price action down for a few weeks before the uptrend resumes.
Bulls have only a few days to prevent a bearish star reversal pattern from forming in the evening during weekly periods, which could dampen the cryptocurrency’s bullish momentum for at least a few weeks this year.
The bearish reversal pattern could dim the lights of the last bull run
Bitcoin fell below $ 31,000 today in one of the largest red daily candles in the asset’s history. Now, with $ 11,000 falling by the minute, the price per BTC has been reduced by up to 27% from the highs set earlier this year.
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The top cryptocurrency has rebounded from the daily low by nearly $ 1,000, but there is now a possibility that bears may have regained control of the trend in higher periods of time.
Bitcoin could form a bearish reversal pattern of the evening star in weekly periods Source: BTCUSD on TradingView.com
If bulls cannot push the price of Bitcoin back above $ 35,000 by Sunday evening, an evening star pattern will form in weekly periods. Evening star patterns are bearish Japanese candlestick reversal patterns that form at the height of an uptrend.
A similar pattern signaled the spike at $ 42,000 in the daily timeframe and is now in danger of expanding into the weekly timeframe.
Where the top cryptocurrency could correct: The Mid-BB
The higher the timeframe of the technical signal, the stronger the results. The initial daily evening star was the turning point of the trend, and now the weekly time frames are falling too.
However, since the monthly time frames have only recently started moving up, a correction should only take a few weeks, not months.
Related reading | The striking similarities between the Bitcoin Peak 2017 and now
As for the correction, if the reversal pattern is confirmed with a close below $ 35,000, a look at the recent bull market suggests that the middle Bollinger Band may be the perfect spot to rekindle buying interest.
The middle BB could serve as the logical target for any correction Source: BTCUSD on TradingView.com
During the last bull market, Bitcoin fell back to the middle Bollinger Band – a simple moving average – before shooting up again. This happened three times after the breakout into a new bull market was confirmed.
If the cryptocurrency is following a similar path, this is only one of three corrections that could be accompanied by another uptrend on the way to the actual high timeframe peak.
Featured image from deposit photos, charts from TradingView.com