The Bitcoin price may have bottomed out around $80,000. However, consolidating this bottom may not be easy after a plunge of $46,000 from the historical high. Bitcoin traders need to exercise caution—prices could see a sharp drop or a drastic rise.
If we assume that the Bitcoin price has indeed bottomed out slightly above $80,000, some may expect a V-shaped rebound. However, due to ongoing liquidity issues, this may not be the most likely scenario. Nevertheless, given the currently very pessimistic market sentiment, a short squeeze could occur, driving prices higher. In summary, for Bitcoin traders, this remains a dangerous phase, and significant price volatility (whether up or down) may still be the norm.
Is the BTC bear flag forming?
The 4-hour chart of BTC shows that the price is currently within an ascending channel—essentially a bear flag pattern. For bulls, the sooner this potential pattern is broken, the better. However, these patterns usually eventually take shape, and this one also indicates that the price will break below the flag's bottom.
To avoid bullish tendencies, cautiously exiting this flag may pull the price down to just over $60,000, which would plunge BTC prices into the depths of a bear market winter.
However, the main liquidity sources for bears are all above $100,000, while below $100,000 there is only scattered funding. Market makers often dominate, so a rise in the final price is likely to be their preferred choice.
Drop to $60,000?
To help everyone understand the reasonable corrective trend of the current bear market flag pattern, here is a daily chart. It drops to around $62,000, just slightly above the major support level of $60,000, far below the bear market level of $70,000.
This is definitely not an expected situation, and there is a strong level of support between $74,000 and $69,000. If the price breaks below this level, it will not only confirm the arrival of a bear market but may also invalidate all Bitcoin price models so far.
The major trend line is crucial
The Bitcoin (BTC) weekly chart is still performing well—as long as the price does not break below the major trend line and confirm a decline, the bull market pattern remains solid. Considering that the Relative Strength Index (RSI) is currently at a low, and the Stochastic RSI has also bottomed out, the likelihood of a price increase is high.
Yes, there might still be some fluctuations at the bottom, but market makers are trying to eliminate those investors who lack strong conviction. Shorting this market is extremely risky.
