- Bitcoin is moving toward a colossal breakdown likely to test lows under $53,000.
A falling wedge pattern on the four-hour chart presents a bearish outlook for BTC.
Bitcoin has for some time been stuck in a narrow range between $58,000 and $59,500. Attempts to hit highs above $60,000 have been thwarted. At the time of writing, BTC is teetering at $58,700 while facing a bearish building momentum.
The four-hour chart shows Bitcoin trading at the apex of a rising wedge pattern. This pattern is considered bearish in technical analysis. It forms after a considerable drop in price followed by a minor recovery.
Two trend lines are used to develop the wedge, whereby one connects a series of ascending highs while the other links climbing lows. A breakdown is anticipated before the trend lines converge.
Note that an increase in volume confirms a breakdown. The downside target is usually precise and is measured from the pattern's highest to the lowest point. For instance, the bellwether cryptocurrency is likely to slide by over 10% and revisit the lows slightly under $53,000 if the technical pattern is confirmed.
At the same time, overhead pressure is bound to increase the longer Bitcoin stays under $60,000. Moreover, a daily close beneath $58,000 may lead to more losses toward $53,000. All the applied moving averages, including the 50 Simple Moving Average (SMA), the 100 SMA and the 200 SMA, are in line to cushion BTC from the massive drop.
On the upside, the Moving Average Convergence Divergence (MACD) shows that the trend is still in the bulls' hands. The MACD line (blue) holds above the signal line at the time of writing. If the indicator remains in the same position, Bitcoin may trade between $58,000 and $59,500 much longer.
Bitcoin intraday levels
Spot rate: $58,700
Trend: Bearish
Volatility: Low
Support: $58,000, $55,000 and $52,500
Resistance: $59,500, $60,000 and $62,000
