Expert argues Bitcoin could fall to $25,000.

A decline in Bitcoin’s price from the prolonged consolidation appears to be the most likely scenario. With market springs fully compressed, a move in either direction could come in the coming days or even hours, said Yanis Kivkulis, EXANTE’s lead strategist.

Bitcoin price fluctuations over the last two months fit well into a triangle, with frequent bounces near $31,500 and renewed selling from ever-lower levels. A month ago, the bounce weakened at $40,000; a couple of weeks ago the price reversed at levels above $36,000, and at the start of the week sellers had the upper hand at $34,000.

So far, Bitcoin sustains enthusiasts’ belief in its appeal should the price fall by half from peak levels. However, the tendency for a downward reversal from ever-lower levels remains a significant factor for selling.

Given the hype-driven nature of cryptocurrencies — they are often bought with an eye toward rapid growth — the prolonged consolidation is increasingly disappointing for speculators. Bitcoin trading volumes have fallen sharply over the past two months, down fourfold from the peak price levels: investors await further declines, and speculators are winding down activity.

Among technical signals, the bears’ side is supported by Bitcoin’s fall below its 200-day moving average at the end of last month and an unsuccessful attempt to rise back above this level at the start of July. On the Bitcoin chart, a ‘death cross’ is forming as the 50-day moving average crosses below the 200-day moving average.

A break below the $31,500 support line could send the price below $30,000 within hours. The question then becomes a fall to around $23,300, where Bitcoin was gathering strength for a rally in January 2021. One cannot rule out that, with momentum, the price could even close the gap around $18,000. Such a turn of events could mimic the crypto-winter of 2018. It would open the possibility for a price collapse of a similar scale, with a bottom near $10,000, and would erase Bitcoin’s rally that began in October 2020.

Ethereum, since July 7, has come under pressure, returning during this period to the area of last month’s lows, which aligns with the broader market dynamics. The current level near $1,900 has previously acted as a significant resistance area. On the chart of the second cryptocurrency, a ‘head and shoulders’ pattern has formed, creating substantial potential for a decline to $600-700 if the market gives up the current line of defense.

Bitcoin, as with Ethereum, has shown precursors for a sharp decline if current levels are breached. More worrying is the recent lull in the crypto market, reminiscent of the bears’ consolidation before a sharp blow. And this should not be read as stability in the crypto market amid sell-offs in equities or commodities. In recent months we have repeatedly seen how quickly calm can be replaced by a large crash.

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