A BTC Sell-off triggers a new bearish reversal trend that makes analysts wonder if bitcoin will hit $20,000 again so let’s read more in our latest Bitcoin news.
The overnight BTC sell-off triggers a bearish reversal again with the market also declining slightly. The 10 percent drop occurred as the traders’ anxiety mounted higher because of a JPMorgan report which cast doubts over the BTC potential to retest the $40K level. According to the lead strategist at JpMorgan&Chase Nikolaos Panigirtzoglou, believes that Bitcoin’s rally happened because of the Grayscale Bitcoin Trust that surpassed about $20 billion worth of BTC in the 1000% rally.
The last couple of weeks saw a drop in the New York fund of about 22 percent and surpassed Bitcoin’s own downside correction by 17 percent. Panigirtzoglou added that the company’s accumulation spree could hinder BTC’s attempt to reclaim $40K or higher adding that the “near-term balance of risks is skewed to the downside.” The bearish fundamental risked launching a new bearish reversal pattern that emerged on the BTC charts lately with the exchange rate forming a sequence of higher lows on the repeated upside rejection while holding the footing at a horizontal support area, looking like a Descending triangle as a pattern. This pattern in an uptrend points to a reversal.
Most traders are looking to open for a short position after the high volume pattern breakdown of the lower trendline support. The price target is about the same height as the Triangle’s maximum height. In Bitcoin’s case, it is more than $11,000 that will put the cryptocurrency at risk of dropping below $20,000. However, slight adjustments to the support trendline will change the bearish setup by turning Descending Triangle into a Bull pennant. It seems that the benchmark cryptocurrency formed a lower high alongside the higher lows and even created a Symmetrical Triangle in an uptrend. This is also a bullish continuation pattern that could have the traders open long positions after a high volume breakout in the Triangle resistance trendline.
The upside target of the Pennant is as high as the flagpole formed before $20K. This puts BTC on the way to hit $50,000 if the bulls are able to sustain the bias. The fundamentals that could trigger the BTC bull pennant include the US coronavirus stimulus with the pro-inflation policies and a bearish outlook for the US Dollar which prompted plenty of corporations and investors to look for a hedge in BTC because of the safe-haven features.
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