Get ready Bitcoin activates significant bearish signal
Despite Bitcoin’s attempts at a recovery, technical indicators are signaling potential concerns for investors. According to an analysis by investment research platform Game of Trades posted on July 2, Bitcoin has re-entered its rising channel around $62,000 after spending four months above it, leading to heightened downside risks as noted by the platform. The platform highlighted Bitcoin’s recent trend of two consecutive 20% corrections since March, contrasting sharply with its behavior in 2023 and early 2024, potentially indicating a significant topping pattern and suggesting further declines.
In May, Bitcoin seemed set for a rebound, supported by upward-pointing key moving averages and the S&P 500 hitting record highs. Game of Trades initiated a trade on Bitcoin anticipating a positive move, but the failure to break above resistance and a subsequent divergence from the S&P 500’s performance raised concerns. The analysis from the platform suggests a potential downside in the short term, cautioning about a possible whipsaw or false breakdown.
Additionally, there are indications of large Bitcoin holders selling over the last few months, a reversal from their behavior at the end of 2022. Currently, Bitcoin is range-bound with an unclear direction. One scenario could see Bitcoin testing the bottom of its price channel before aligning with the S&P 500, resembling a classic bear trap move.
As of recent data, Bitcoin is struggling to maintain its valuation above the $62,000 support level after failing to sustain values over $63,000. The asset’s price sat at $62,323 with daily losses exceeding 0.6%, yet showing a 1% increase on the weekly timeframe. The bullish trend remains intact as long as Bitcoin stays within the rising channel; a breach below the lower trendline may indicate a potential trend reversal or deeper correction, while a solid breakthrough above the upper trendline might signal continued bullish momentum.
Please note that the information provided here is not investment advice. Investing carries risks, and it’s essential to exercise caution as your capital is at stake.