Bitcoin Technical Analysis January 23: Lingering Under $90K – Surge Hopes Fading or Just Paused?
The Bitcoin price is not rising. Reacting to some of the events in Davos perhaps, there were some recent dips and upside spikes, all within a $3,000 range, but the main takeaway is that Bitcoin is lingering below $90,000. Is this the lull before a storm, and in which direction could the storm go?
Bear pennant forming?
Source: TradingView
Looking at the 4-hour time frame for $BTC, it can be seen that a possible bear pennant is developing. If this were to play out we could be looking at a crash all the way down to $80,000, which would pretty much correspond with the lowest low in the current entire distribution movement.
As can be seen, the price action is right at the bottom of this pennant now. If it falls through and is confirmed below, look out Bitcoin holders. Maybe this could be one last thrash to clear out any investors left who are lacking real conviction.
Double bottom if bear pennant plays out?
Source: TradingView
The bulls do need to face reality. The $BTC price has fallen through the ascending triangle, and it has confirmed the breakdown. It could be argued that this was also true for the upside fakeout, so this does need to be borne in mind.
Nevertheless, let us say that the bear pennant does break down. If the price follows the measured move of the pattern, this would take it down to just below $80,000. If one looks left from that point, it can be noted that this is on a horizontal line with the swing low of this entire corrective move, and thus a double bottom would then be in play.
Double bottoms are bullish bottoming patterns, and therefore this would be a good area for the next potential rally to take place from.
Bear flag move to $55,000?
Source: TradingView
If we are going to look at certain patterns, we might as well look at the biggest one that is still playing out right now, and that’s the bear flag. It can be drawn so that the last rally up to $98,000 retested the very top limit of the flag. From there the $BTC price has come back to the very bottom, where it is currently at the brink of a possible breakdown.
If this pattern plays out and its measured move is arrived at, this would take the price all the way down to around $55,000, which could be the entire extent of a potential bear market. Even then, this would only amount to a 56% correction from the top, which is far less than previous bear markets.
Finally, it must be noted that today’s article is a lot of speculation. We’ve looked at ‘what if’ scenarios, but they are based on probabilities that the $BTC price follows the downside moves out of bearish patterns.
Nobody knows which particular coloured swan will appear next, and whether this will or won’t lend itself to a rally. The jury is still out, and until such time as Bitcoin definitely starts moving in one direction or the other, the mystery is going to persist.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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