Should Bitcoin Fall Further? Check out this pattern


A few weeks ago I wrote about a chart pattern forming in Bitcoin
and other cryptocurrencies that indicated a sharp move was likely ahead. Since then, Bitcoin has plummeted after the FTX cryptocurrency exchange suffered a liquidity crisis and filed for Chapter 11 bankruptcy protection. Bitcoin has broken below its descending triangle pattern on heavy volume, which is a bearish sign. Interestingly, another pattern has formed over the past week, called a pennant, which is typically a continuation pattern. If Bitcoin’s pennant pattern breaks out at high volume, even further declines are likely.

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The chart below shows the pennant pattern on Bitcoin’s daily chart:

The chart below shows the pennant pattern on Bitcoin’s hourly chart:

Bitcoin’s weekly chart shows the recent breakdown of the descending triangle and the next $10,000 support level, which should act as a price target if the crypto bear market continues:

A similar pennant pattern forming in Ethereum on the daily chart:

Ethereum’s hourly chart shows the pennant in more detail:

For now, I’m waiting to see if Bitcoin and Ethereum break their high-volume pennant patterns for confirmation. If a breakdown occurs, it will likely indicate that another wave of the crypto winter or crypto bear market is on its way. Such a breakdown would likely coincide with additional scandals in the crypto world, along with a serious loss of confidence as investors and traders jettison cryptocurrencies and related investments.

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