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Bitcoin Price Forecast: Signs of Weakness Emerge, Bearish Sentiment Grows

By:
Bruce Powers
Published: Apr 17, 2024, 06:28 GMT+00:00

Bitcoin faces increasing bearish sentiment as it fails to break out of a wedge pattern, indicating a possible test of lower support levels ahead.

Bitcoin continues to show signs of weakening, and it may have only just begun. Last Friday Bitcoin triggered a failure of bull wedge breakout as the bottom boundary line of the pattern was broken. Further weakness triggered with a drop below the orange 50-Day MA.

Bitcoin had stayed above that line since February 7. In addition, there have been three daily closes below the 50-Day line and today will likely be the fourth. This confirms increasing bearish sentiment that likely will lead to a test of support at lower prices. Moreover, although it is probably difficult to see, the blue 8-Day MA began to cross below the 50-Day line today, further pointing to a correction.

A screenshot of a graph Description automatically generated

First Lower Target at 56,159

If the prior swing low and bottom of the pennant at 60,771 is broken to the downside, the 50% retracement at 56,159 becomes a target. That target is strengthened by the fact that a falling extended ABCD pattern, shown in red on the chart, also points to the same price. When two indicators point to the same price it provides a stronger clue.

At a price of 56,159 the CD decline of the ABCD pattern will be 127.2%, a Fibonacci ratio, of the AB decline. Bearish confirmation can be seen in the continuation of the decline in the relative strength index (RSI). A lower target utilizing the 161.8% Fibonacci ratio highlights a target around 51,639, which is close to the 61.8% retracement at 51,999.

Correction is Still in Early Stages

Since Bitcoin failed to progress higher the chance for a bullish continuation prior to a deeper retracement has diminished. Therefore, advances into resistance areas are likely to be met with increased selling pressure rather than an eventual breakout to new highs. Further retracement and/or consolidation prior to a move higher will be health for the bull trend. Gains need to be digested to clear the way for the next rally. And that will likely take a little time.

Nevertheless, a decisive breakout above Monday’s high of 66,929 will provide a sign of strength. Further still on a rally above Saturday’s high of 69,100. However, Bitcoin will be rising into a range of potential resistance and likely will find it.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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