In recent days, Bitcoin has shown signs of potential reversal, showing a daily rise for three consecutive days.The last time this pattern was observed was between early July and mid to late June, when Bitcoin rose from slightly below $25000 to over $31000
In recent days, Bitcoin has shown signs of potential reversal, showing a daily rise for three consecutive days.
The last time this pattern was observed was between early July and mid to late June, when Bitcoin rose from slightly below $25000 to over $31000.
The changes in price dynamics have led to changes in market sentiment, and the bearish outlook has gradually given way to a more bullish view.
Bitcoin has not only successfully avoided the confirmation of a double top on the weekly chart, but its price trend has also sparked discussions among analysts about the possibility of Bitcoin forming a double bottom shape.
Is Bitcoin gradually transitioning from a double top to a double bottom?
Double bottoms are a classic technical analysis model that indicates that the market trend may shift from bearish to bullish.
Its characteristic is that there are two different valleys or lows in the price chart, with a peak or small high point in the middle.
This pattern is similar to the letter "W", where the first trough represents a significant low point, followed by a temporary rebound, followed by a second trough, usually close to the price level of the first trough.
When the price breaks through the resistance level between the peak or two troughs, an effective double bottom is confirmed, indicating a potential reversal of the upward trend.
Renowned cryptocurrency analyst RektCapital recently shared his insights, indicating that Bitcoin's current price pattern resembles a double top on a weekly chart, which typically indicates a bearish reversal, characterized by an "M" shape.
However, to confirm this, prices need to fall below the support level of $26000.
At present, the transaction price of Bitcoin is $26618, which has successfully resisted the double top verification.
On the other hand, forming a "W" shaped double bottom requires Bitcoin to rebound from the $26000 mark. Today, he wrote on Twitter, "Is this BTC double top actually a double bottom? The simple answer is - technically, yes.
But to form a double bottom, BTC needs to rebound from $26000 to $306 million (this is its verification point)
He further emphasized the challenges faced by Bitcoin, pointing out the uncertainty of the $26000 support level and the numerous convergence obstacles in the future, which may hinder the completion of the double bottom formation.
RektCapital elaborated on the importance of the $26000 level and wrote on Twitter, "It seems that BTC may first choose the 'relief rebound' route in order to transform the old support level into a new resistance level
He also pointed out Bitcoin's bearish monthly candle closing in August, emphasizing that Bitcoin's closing price was below about $27150, thereby confirming its loss of support.
Therefore, he warned that,The current price trend of Bitcoin may only be a relief rebound to confirm a new resistance level of $27150, and then fall into the $23000 area.
Facing more resistance levels in BTC prices
Therefore, it is obvious that BTC still needs to break through the main resistance level of $27150 before the bulls' dream confirms the double bottom form.
But before breaking through $30600 and confirming a double bottom, there are other key obstacles that need to be overcome.
On chain analysis company CryptoQuant emphasizes the role of short-term Bitcoin holders, who typically provide liquidity for significant price changes.
According to their data, the breakeven price of these holders ranges from $27500 to $29000. If Bitcoin remains below these levels for a long time, these holders may be incentivized to sell, which may exert downward pressure on prices:
The longer we spend below these price levels, the greater the motivation to exit market liquidity, and the fundamental condition for Bitcoin to return to an upward trend depends on whether the price jumps above the short-term realized price.
Within the 4-hour time frame, BTC needs to overcome three main resistance levels: $26857 (38.2% Fibonacci pullback), $27365 (23.6% Fibonacci pullback), and $28186 (grayscale high since August 29th).
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