- Bitcoin price has been in a strong bearish trend.
- It has formed a double-top on the weekly chart.
- Bitcoin could still crash to about $19,937.
Bitcoin price continued in a consolidation mode as investors worry whether the recent downward trend has more room to run. The BTC coin is trading at $30,390, where it has been in the past few days. This price is about 55% below its all-time high of almost $70,000.
Has BTC bottomed?
Bitcoin price has been in a sttrong bearish trend in the past few months as demand for the coin retreats. This performance has mirrored that of other top assets like stocks. Analysts attribute this sell-off to the hawkish Federal Reserve.
In the United States, the Dow Jones and Nasdaq 100 indices have all moved to a bear market this year. A bear market happens when an asset drops by 20% from its highest point.
Bitcoin’s sell-off has had significant implications. For one, most people who bought Bitcoin in the past few months are now in the loss-making category. This includes companies like MicroStrategy and Tesla.
Learn more about how to buy Bitcoin.
At the same time, after investing huge sums of money in new plants, many Bitcoin mining companies are now making losses. That’s because the cost of doing business has been in a strong upward trend even as Bitcoin prices decline.
The situation could worsen for Bitcoin miners now that New York legislators have voted to ban proof-of-work mining in their state. Other progressive states could also follow suit in the coming years.
So, a common question among Bitcoin traders is whether the price bear market has capitulated or whether it has bottomed.
Bitcoin price prediction
Technical analysis is one of the best approaches to answer the question wether Bitcoin price has bottomed.
Turning to the weekly chart, we see that BTC has not consolidated in this range by accident. Looking back, we see that this is the same level where it bottomed in July 2021.
A closer look also shows that Bitcoin has formed a double-top pattern whose chin is at the current level. In price action analysis, this pattern is usually a bearish sign. At the same time, the 25-week and 50-week moving averages have made a bearish crossover.
On the other hand, the closely watched Mayer Multiple has dropped to about 0.73, which is a sign that it is getting oversold.
Therefore, because of the double-top pattern, I believe that the sell-off is still intact. If this view is correct, the next reference level to watch will be at the 2017 high of $19,937.
