Trader flags high probability of a medium-term Bitcoin price decline

The trader Илья Мещеряков explains the current market situation.

Last week proved relatively calm and broadly predictable for the market. In the previous briefing I suggested that the dominant BTC scenario would be further erosion of buyers. At present, BTC has fallen to $11,400, and this may not mark the end of the medium-term decline.

BTC has already significantly shaken out holders of short positions false breakout to $12,400, and briefly left them alone. The downside move could continue to sweep up buy-stop orders. The first ones were placed around $11,500 and have already been triggered, while those below $11,300 (the second likely buyers’ stop-loss zone) remained untouched.

In the medium term, I expect several stages of decline — below $11,300 (to the lower red zone on the chart below), and then to $11,000, the lower boundary of the price channel in which the asset currently trades. These declines will be interspersed with rallies after the local minima.

Probable stop-loss zones for buyers (drawn in red at the bottom) and the resistance zone (drawn in red at the top). Hourly BTC/USDT chart from TradingView.

In the coming period BTC could drift into a sideways range, as it did in May–July 2020, though for a shorter duration. Bitcoin is drawing a similar formation, albeit at a faster pace (see chart below for comparison). If we draw a rough analogy, that suggests roughly another 2–3 weeks of sideways movement.

Hourly BTC/USDT chart from TradingView.

The comparison of BTC chart patterns shows clearly drawn support lines (in green). The blue zone on the left marks the completed phase of the formation.

Long-term prospects remain positive. The market has not exhausted its accumulated strength and has only recovered after the drop earlier this year. Accordingly, the target level remains $13,100, after breaking out of the current consolidation. More global targets can be set after reaching these levels.

Follow ForkLog news on Telegram: ForkLog Feed — full news feed, ForkLog — the most important news and polls.