Bitcoin BTC
Bitcoin’s price action looks heavy while the series of lower highs remains unchallenged. Ever since it tested the 30k level in the middle of May, Bitcoin’s bounces fail to break the series of lower highs, leading to the impression of another bearish technical pattern in the making – a descending triangle.
A descending triangle’s main characteristic is a horizontal base, and the price puts pressure to break it. All this time, any bounces are not strong enough to break the previous lower high. In Bitcoin’s case, the $40k is the previous lower high and a move above that mark would invalidate the descending triangle’s scenario.
The cryptocurrency market’s frenzy has diminished in the last weeks since Bitcoin’s consolidation started. The drop from above $60k has put pressure on other cryptocurrencies too, as the flows out of the digital assets and into traditional hedges against inflation, such as gold, predominated during the month of May.
Bears may want to wait for the Bitcoin price to close below $32,500 before going short. As seen in the chart below, the $32,500 level was only pierced twice, but the market was not weak enough to close below. Such a close should trigger more weakness, with a potential move to $22,500 in the cards, while $38,000 would invalidate the scenario.
Follow Mircea on Twitter.
