Bitcoin (btc) price continues at depressed levels in what has become one of the crypto markets quieter periods in History. Meanwhile, several technical and fractal setups suggest that the BTC/USD pair could fall as low as $21,750 in the coming months.
Let's take a closer look at the nearest support levels to determine how low the price of Bitcoin can go.
Bearish flag channel hints at $23,000 BTC price
Bitcoin has consolidated within a horizontal trading range since mid-August 2023, defined by $26,670 as resistance and $25,650 as support. Briefly, BTC price broke out of range in reaction to fundamental news, such as new Bitcoin ETF applications and the FTX Liquidation Fears.
But overall, traders have kept the BTC price within the range of $25,650-26,670. Generally speaking, this range looks like a "bear flag," a bearish continuation pattern characterized by a consolidation channel that forms after a strong downtrend.
As a rule of technical analysis, bearish flags resolve after the price breaks out of its downward range and falls as much as the height of the previous downtrend. Applying these parameters to Bitcoin's current price consolidation brings its bearish flag target to around $23,000.
In other words, the price of BTC may drop by almost 15% from current price levels by the end of the year.
Bitcoin Bear Market Support Setting
Bitcoin bear markets since 2017 have generally exhausted themselves near a common rising trendline support, as shown below. BTC price tested the trend line in November 2022 at around $16,750 and has since risen by 70%.
That being said, Bitcoin may have already bottomed out in the current bear market. However, the price will need to decisively break above its 0.236 Fib line near $28,350 to confirm its long-term bullish recovery based on the historical fractal, which it simply failed to do.
Related: Bitcoin cycles are changing: Bloomberg analyst Jamie Coutts explains how and why
Bitcoin is now below the 0.236 Fib line, increasing the chances of a pullback towards the bear market trend line support which is also near $23,000.
Bitcoin "death cross" soon?
Bitcoin is getting closer to forming a death cross between its 50-day (the red wave) and 200-day (the blue wave) exponential moving averages (EMA).
This is Bitcoin's third death cross formation during the Federal Reserve's interest rate hike period, with the previous two crosses preceding 17-18% price drops.
Therefore, if the fractal repeats, the bearish BTC price target in this case will be around $21,750.
The views, thoughts and opinions expressed here are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Post navigation
