Bitcoin Price on Brink of Breakdown, Correction Looms
The Bitcoin price is on the verge of breaking down below its wedge pattern trendline, raising concerns among traders about a potential correction.
A bull pennant pattern has formed on top of a big rally, but it may not be as bullish as expected. The breakdown could be genuine or just a fakeout, with some candle tails already showing signs of reversal.
If the price continues down, there is support at $76K, which would hardly be bearish. However, if the correction gains momentum, it could reach the healthier target at $73K, a 10% drop from current levels.
The daily chart shows that this breakdown may indeed be bona fide, with the new daily candle opening below the bottom trendline of the pennant. The price looks set to head lower, with targets ranging from $76K to $69K-$70K, which ties in with the 0.618 Fibonacci level and the 200-day SMA.
The weekly RSI has broken through its downtrend line, but it's unclear if it can hold above at the end of this week, giving a crucial indication for bulls going forward.