- Peter Brandt identified a bearish “double top” pattern in Bitcoin’s chart, suggesting a potential drop to $44,000 if it materializes.
- Bitfinex observed signs of a potential end to the market correction.
The correction of the leading cryptocurrency might extend to the $44,000 mark, according to technical analyst and Factor LLC head Peter Brandt.
Has Bitcoin completed a double top?
Yes or no????
If yet, minimum target is $44,000
What do you think?$BTC pic.twitter.com/EpzeihHJtF— Peter Brandt (@PeterLBrandt) July 7, 2024
The expert questioned whether Bitcoin has completed a “double top” pattern on the daily chart. According to his calculations, the upper level of this model is around $72,000, while the lower level is at $43,970.
A “double top” is a technical pattern indicating a medium- or long-term trend reversal from bullish to bearish. It forms when an asset’s price reaches a peak twice with subsequent pullbacks.
In discussions under the post, Brandt acknowledged that the current deviation from the peaks of the “top” is only 10%, while the model suggests a 20% drop. Therefore, the analyst considered the possibility of the bearish movement ending or continuing, depending on the future dynamics of digital gold.
On July 5, Bitcoin fell below the $54,000 level. However, the next day, the asset recovered above $56,000.
At the time of writing, digital gold is trading at $57,200, having gained 2.5% over the day.
Potential Bottom
In a weekly report, Bitfinex analysts pointed to a probable local bottom for Bitcoin, as indicated by market data.
They attributed the decline to news about compensation to Mt.Gox creditors and the movement of bitcoins confiscated by the German government. However, the market realized that the volume of assets involved was not as significant, the experts noted.
Additionally, researchers observed a narrowing spread between the implied and historical volatility of the leading cryptocurrency, indicating that investors expect greater stability.
A large number of “late short positions” also indicates a lack of clear confidence in any market direction, added Bitfinex.
“While long-term Bitcoin holders continue to realize significant profits, sales by short-term investors are potentially nearing exhaustion. The SOPR indicator for short-term traders is 0.97, indicating sales at a loss. In the past, when this occurred, prices rebounded as selling pressure eased,” the report states.
Analysts highlighted that for the first time since May 1, the funding rate for Bitcoin perpetual contracts turned negative.
The combination of these factors — oversold conditions, negative funding rate, and SOPR recovery — often signals a bottom, according to Bitfinex.
Some experts have suggested Bitcoin could crash to $50,000, believing that the sharp decline will not be limited to the current level due to a shift in sentiment.
Meanwhile, analysts at Standard Chartered predicted a new all-time high for the leading cryptocurrency in August, followed by a rise to $100,000 by the U.S. presidential elections in November.