Bitcoin Price Forecast: BTC Risks Strong Drop Below $60K After Double Top

Bitcoin (BTC) has gone down by nearly 3% in the past 7 days after failing to climb above a key resistance. The result: a new bearish pattern has emerged that would be confirmed if the top crypto breaks below $60K.

The macroeconomic backdrop continues to be unfavorable for cryptos as analysts’ projections now give a rate hike in September an 80% chance. Higher rates plunge the valuation of risky assets as investors can obtain better or equal yields with low-risk instruments.

Net inflows to exchange-traded funds (ETFs) also reflect a shift in market sentiment in the past few days. These vehicles have booked net outflows for four days in a row, with investors withdrawing over $500 million during this short period.

Although July may break a 2-month streak of strong net outflows, with two more days to go, it is still possible that a strong outflow exceeding $200 million could push the monthly figure into negative territory.

Whales Bought $1.30 Billion Worth of Bitcoin in July

“While the regulation front is looking positive, we see no catalyst for a significant short-term rally absent a shift in monetary policy expectations, which, if anything, moved further away this week,” highlighted Alex Schmidt from CoinShares in the firm’s latest market update, published just 5 days ago.

“The market is currently trading two competing binaries: the Clarity vote count and the tanker war, and so, range trading remains our base case,” Schmidt added.

Despite its relatively stalled price action, whales kept amassing BTC tokens in July. According to on-chain data from Santiment, wallet addresses holding between 1 and 100,000 BTC added 20,000 tokens, valued at approximately $1.3 billion.

Both small and large whales holding between 100 and 10,000 tokens participated in this buying spree, indicating rising conviction that BTC could soon hit a floor.

We have been stating repeatedly that whale activity indicates ongoing accumulation, which suggests that we could be either near or at this cycle’s bottom.

What’s missing to push BTC to higher levels is a strong catalyst that creates some FOMO and breaks through key resistances to squeeze bears out of their shorts.

Bitcoin Formed a Double Top Pattern at $66K

Heading to the daily chart, we flagged the formation of a bullish inverse head and shoulders pattern as a result of the latest rejection of a move above $66,000.

This price zone has turned into the key resistance to watch in case of a rally, as the selling pressure remains strong at that particular level.

If bulls manage to get past it at some point, a short squeeze could drive the price of BTC to around $74,000 in the near term.

Since this bullish pattern popped up, a retest of the $60K support is still on the table without necessarily invalidating Bitcoin’s recovery. However, a break below this mark could result in a much more dramatic correction to the $50K area, as BTC just formed a double-top pattern at $66,000.

As we have stated in previous Bitcoin price prediction articles, the $60K level is a highly relevant, long-dated support that, if broken, would invalidate a buy signal in the weekly chart that has marked the end of previous bear markets three times in the past 8 years.