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The Bitcoin recovery has not been as impactful as expected, failing to break $60,000 even after a return of bullish momentum. Given this, expectations of a bearish reversal have become the norm as analysts do not believe that the pioneer cryptocurrency has enough steam to sustain the current momentum. One of the analysts who believe the price is destined for a downturn is Finn Oakes, who predicts a return to the $53,000 territory.
Bitcoin Forms Double Top Pattern
In the analysis that was shared on the TradingView website, crypto analyst Finn Oakes explains that the Bitcoin price has now formed a double top. This occurred after the Bitcoin price crossed the $59,000 level two times and both times, the price had failed to successfully clear this level.
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This double top pattern is shown on the 4-hour hour chart, where there is a reversal pattern forming as a result of this. This double top is bearish for the price and could signal a continuation of the downtrend that began last week. In such a case, the bulls have a hard fight ahead of them.
Breaking down the double top, the crypto analyst explains that it has now shown $59,000 to be a strong resistance zone. This means for any rally to occur, the price would successfully have to beat this resistance before it is confirmed.
In contrast to the resistance level, $56,000 has now emerged as support for the Bitcoin price. This gives both bulls and bears a tight $3,000 room to fight for dominance and push the price either way. Otherwise, sideways movement could continue.
Target For The Decline
Given the formation of the double top on the 4-hour chart, the crypto analyst expects the price to drop once again. For the first scenario, where the Bitcoin price breaks below the $56,000 support, the crypto analyst expects a downtrend to the $53,000 level.
However, it doesn’t exactly end there if the downtrend is not stopped. In this case, the chart shows the price falling below the $53,000 level and moving toward $52,000. Although, this seems to be a worst case scenario as opposed to an expected target.
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Furthermore, with the rising volume during the downtrend, the analyst believes this indicates that there is more selling going on in the background, something that could contribute to the price decline. “The trading volume has increased during recent down days, indicating strong selling pressure. This reinforces the current downtrend,” Oakes said.
At the time of writing, the Bitcoin price is struggling to hold the $58,000 level. However, it is still seeing 1.08% gains in the last day, according to data from Coinmarketcap.
Featured image created with Dall.E, chart from Tradingview.com
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