Bitcoin Price Signals Bearish Pattern, Why BTC Could Drop Another 5%

Bitcoin price has yet to break through the $38,000 resistance zone. BTC is likely forming a double top and could decline towards the $34,500 support.

• Bitcoin started a further decline from the $38,000 resistance zone.
• The price is trading below $36,750 and the 100 hourly simple moving average.
• There is a connected uptrend line forming with support near $36,250 on the hourly chart of the BTC/USD pair (Kraken data feed).
• The pair could decline further in the event of a break below the $35,950 support.

Bitcoin price forms double top scenario

Bitcoin price made another attempt to clear the $38,000 Resistance. However, BTC failed to breach the $38,000 resistance and started a fresh decline. It appears that the price is forming a double top pattern near the $38,000 area.

There was a clear move below the $37,200 and $37,000 levels. The price even climbed below the $36,500 level and the 100-hour simple moving average. Eventually, the bulls appeared near the $35,500 level. A low was formed near $35,517 and the price is now correcting losses.

The price climbed above the 23.6% Fib retracement level of the downward move from the $37,950 high to $35,517 low. Bitcoin is now trading below $36,750 and the 100 hourly simple moving average. There is also a bullish trend line forming with support near $36,250 on the hourly chart of the BTC/USD pair.

On the upside, immediate resistance is near the $36,700 level. The next key resistance could be near $37,000 or the 61.8% Fibonacci retracement level of the downward move from the $37,950 high to $35,517 low.

Source: BTCUSD on TradingView.com

A close above the $37,000 resistance could begin a strong move higher. The first major resistance is near $37,500, above which the price could accelerate further. In the mentioned case, it could test the $38,000 level. Any further gains could send BTC towards the $39,200 level.

More losses in BTC?

If Bitcoin fails to break above the $37,000 resistance zone, it could continue lower to complete the double top trend. Immediate downside support is near the $36,200 level.

The next major support is $36,000. If there is a move below $36,000, there is further downside risk. In the stated case, the price could drop to the $35,500 support in the near term. The next key support or target could be $34,500.

Technical indicators:

Hourly MACD – The MACD is now losing momentum in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.

Major support levels – $36,200, followed by $35,500.

Major resistance levels – $36,700, $37,000 and $38,000.