Bitcoin, the world's largest cryptocurrency by market capitalization, might be facing downward pressure soon, as recent analysis reveals a potential bearish pattern forming on the daily timeframe. This could be a cause for concern for those interested in the short-term performance of the cryptocurrency.
As more Bitcoin liquidation levels stack up, the risk of a pullback seems to be increasing, especially following BlackRock’s reported sale of a large portion of its Bitcoin holdings, which resulted in a net outflow of $184 million from its Bitcoin ETFs over the past seven days, according to the data fromETF Database Pro.
Bitcoin’s Price Levels: Testing Resistance
Bitcoin's price is facing significant resistance at several key levels, with one of the most important being the $102,000 mark, according to Fibonacci extension levels. Analyst Josh from Crypto World highlighted this as a critical point where the price might either be rejected or continue its upward trajectory. If Bitcoin fails to break through this resistance, a downturn could be on the cards.
Despite the resistance, Bitcoin is still in a larger bullish trend. The SuperTrend indicator remains green, signaling that the overall market sentiment is still positive. However, this bullish momentum might not be sustainable, as bearish divergence is beginning to show up on the weekly chart. This suggests that Bitcoin's bullish run could be running out of steam, with the cryptocurrency possibly entering a period of consolidation or short-term pullbacks.
The Risk of Cooling Momentum
The formation of a bearish divergence on Bitcoin's charts indicates a slowing of bullish momentum, which could lead to a cooldown phase. The divergence suggests that the momentum behind the recent price rises is weakening, potentially resulting in price pullbacks or sideways movement in the near future. Investors are now keeping a close watch on the cryptocurrency as it navigates these uncertain waters, which could lead to increased volatility.
