- The Bitcoin price prolongs its consolidation within a pennant pattern to recoup its momentum for next breakout.
- Hougan emphasized that the primary reason behind the downturn is widespread investor selling pressure.
- The 100 EMA slope acts as dynamic resistance against recovery attempts in the 4-hour chart.
The pioneer cryptocurrency, Bitcoin, showed a slight downtick of 0.7% on Thursday to trade around $67,463. The downtick signals the continuation of its current consolidation trade that many consider a potential bottoming sign for BTC’s current downtrend. With viral claims for BTC freed from Jane Street manipulation and Long-term holders returning, the coin price is poised for significant volatility and recovery attempts in near term.
Bitcoin Volatility Sparks Blame Game
The cryptocurrency market is once again entering a contraction period, where the price of Bitcoin has been quite volatile over the past few weeks. This development has led to a heated discussion among market participants as to what has caused the change.
In a post shared on the X, Matt Hougan from BitwiseInvest provided his analysis, countering popular but unsubstantiated stories of events as “The conspiracy theories are wild.” According to his account, the target of suspicion has moved around different organizations and concepts in the space successively from the cryptocurrency exchange called Binance to the market maker Wintermute, then to a hedge fund that operates from an offshore location without clear identification, then to ideas involving Bitcoin that exists on paper only without any backing, with the latest being directed at Jane Street, and forecasts indicating that yet another entity will take the spotlight shortly.
The main driver, in his view, is the decisions of a large number of participants who were in optimistic positions on Bitcoin to get rid of their stakes in the asset. “They sold it via spot, they sold it by unwinding leveraged positions, and they sold it by writing calls against their bitcoin.”
The reason these sales were initiated was related to a number of elements. “They sold because of the four year cycle and because of quantum fears and because they wanted to invest in AI start ups and for other reasons.”
Hougan feels the end of the selling phase is coming. “They are mostly done selling and we are in the process of bottoming. We will set new all time highs in the future. “This is a classic crypto winter and there will be a classic crypto spring.”
Acknowledging the need for identifiable causes in difficult periods, the executive added, “People want someone to blame — I get it — but the reality is far more boring than that.”
BTC Price Coiling For Its Next Leap
Over the past three weeks, the Bitcoin price has been wavering around the $66,000 mark, amid broader market uncertainty. A deeper look at the 4-hours chart shows this consolidated resonated strictly within the two converging trendlines of a pennant pattern.
The chart setup is characterized by a dynamic correction trend followed by a temporary sideways action to renew bearish momentum. A downsloping trend in 100-and-200-EMA further accentuated the broader bearish sentiment in the market.
With today’s downtick, the Bitcoin price currently trades at $67,400. If selling pressure persists, the coin price could plunge 3.5% down to challenge the bottom trendline at $64,000. A bearish breakdown below this floor will further accelerate the sellers grip over this asset and potentially pull BTC to $60,000, followed by $52,850.
On the contrary, if Bitcoin price breaks above the overhead trendline and short-to-mid term recovery is expected, chasing $80,000 and $86,000.
Also Read: Vitalik Buterin Sells 19,318 ETH worth $38.5M; Surpassing Extectations
