A well-known technical analysis pattern has emerged on the Bitcoin chart: the bear flag. This pattern is often a precursor to declining prices, and several analysts are painting a bleak short-term picture for the cryptocurrency.
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The Bear Flag #
Bitcoin’s price action has formed a bear flag on its chart. This classic pattern indicates a downtrend that appears to be breaking out, which could be followed by a further decline:
The flag consists of a flagpole and the flag itself, but inverted. The image also shows the price target for the drop, which according to this analysis by kanguhalubale is around $67,000 per Bitcoin. A higher price for Bitcoin was rejected around the $93,000 level. The pattern began with Bitcoin’s decline from $107,000 on November 11.
According to this analysis, a daily close below $90,000 could pave the way for a freefall to $67,000. This is a similar price level to the top of the 2021 bull market. Such a move would represent a 25% drop from Bitcoin’s current price.
Other Analyses #
In a post on X, Roman pointed to a chart showing that the MACD and RSI indicators are signaling an extremely overbought market. The current movement could allow these indicators to cool down, enabling the downtrend to continue. The analyst noted that volume decreased while the price rose, suggesting more downward price action is likely.
Colin Talks Crypto also confirmed on X that we are looking at a bear flag. He believes the lower bound will be in the $74,000 - $77,000 range. In that scenario, Bitcoin would be extremely oversold, which he thinks could lead to a quick rebound.
Aaron Dishner also sees a bear flag but is slightly more optimistic. He observes that volumes are too low to cause significant price movements and expects mostly sideways action for Bitcoin’s price in the near term.
Adding to the pressure are macroeconomic uncertainties, turning negative ETF flows, a wave of leverage position liquidations, and low volume. According to a report from Glassnode, many traders are pulling back and selling their Bitcoin.