Bitcoin’s Double Top Suggests BTC Could Fall to $50K: Analyst

bitcoin 6 24 2024 LearnCrypto Powered By Wyckoff SMI 2024

The bearish pattern hints at a further correction.

Bitcoin (BTC) has carved out a double-top price pattern, signaling a potential bearish trend change ahead of key data release that could influence the Fed’s interest rate path.

Bitcoin’s price journey has been a rollercoaster this month. After surging to nearly $70,000, approaching the all-time high of March, it has now retreated to $63,000, decoupling from Nasdaq’s continued move higher, largely due to faster selling by miners, profit-taking by investors near lifetime highs, and outflows from the U.S.-listed spot exchange-traded funds.

The price action has formed a double top, a bearish technical analysis pattern comprising two peaks with a valley in the middle, usually appearing after a notable uptrend. The second peak represents uptrend exhaustion, with the eventual breach of the low hit between the two peaks confirming a bearish trend change.

“Technically, bitcoin appears to follow a double top formation, whereas the support level is being tested. This chart formation should be our base case unless it becomes invalidated. This formation could easily see a drop to $50,000—if not $45,000,” Markus Thielen, founder of 10x Research, said.

“Yes, the U.S. election and CPI should be bullish later this year, but we can still have a steeper correction,” Thielen added.

BTC's double top. (10x Research)
BTC’s double top. (10x Research) (10x Research)

However, the Fed’s preferred inflation yardstick, the personal consumption expenditures (PCE) price index for May, is expected to show the slowest monthly advance in the core figure in over three years. That would cement the case for renewed Fed rate cuts from September, potentially putting a floor under risk assets, including bitcoin.

“[Recent] Strong economic data has forced [bond] yields higher and precious metals lower on Friday. This continues to stand in the way of digital hard assets like crypto,” Greg Magadini, director of derivatives at Amberdata, said in the weekly newsletter shared with CoinDesk.

“This week we have multiple Fed Governors speaking, GDP and most importantly PCE on Friday (the Fed’s favorite inflation indicator),” Magadini added.

Economists surveyed by Bloomberg expect no change in the PCE price index and a meager 0.1% uptick in the core PCE, amounting to 2.6% annual advances in both the headline and core figures. The projected core increase, excluding food and energy, would be the smallest since March 2021.

BY: Omkar Godbole

Edited by Parikshit Mishra.


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