Bitcoin has potentially entered a new phase of decline as it recently fell to $86,000, breaking out of a bear flag that had formed over nine weeks. This movement raises questions about whether the cryptocurrency might continue to descend to $70,000 or lower.
The breakdown occurred after the price slipped below the critical $88,000 threshold, resulting in a rapid descent to the $86,000 level. Although there was a brief bounce from this point, analysts suggest that it might only serve to confirm the breakdown rather than signal a reversal.
Currently, bulls are attempting to push the price back above the $88,000 resistance. However, indicators such as the Stochastic RSI suggest that this upward movement may soon lose momentum, increasing the likelihood of a renewed downward trend, potentially targeting the $80,000 mark next.
On a broader scale, a look at the daily time frame reveals that Bitcoin has fallen below the 50-day simple moving average (SMA). Unless it can reclaim this level alongside the bear flag, further declines seem imminent. By measuring the potential drop from the ascending channel, analysts estimate a target around $79,400, while measurements from the bear pennant suggest a drop below the $80,000 level.
Moreover, the last local low was observed at $80,000, which could form a double bottom pattern if the price tests this support again. However, a more alarming scenario presents itself if Bitcoin were to dip below the significant $69,000 support level. Such a move would be particularly painful for investors, especially considering the time it took to breach this level during the previous bull market.
Furthermore, the measured move from the bear flag indicates a potential target of $53,000 if the downtrend continues. This level coincides with a support area from an 8-month bull flag formed in 2024, adding to its significance. As the market grapples with these developments, traders and investors alike should remain vigilant, as a breach of the 100-week SMA could lead to a swift continuation of the downward trend.
In conclusion, the current landscape suggests that Bitcoin”s price action is far from stable, and the next few trading sessions will be critical in determining whether a recovery is possible or if the bear market will extend its grip on the crypto sector.
