An overnight sell-off in the Bitcoin market Monday brought its prices down from an intraday high of $34,888 to as low as $31,435.
Nevertheless, the last couple of weeks saw a decline in the New York fund—of about 22 percent—that surpassed Bitcoin’s very own downside correction of 17 percent.
Mr. Panigirtzoglou added that a drop in Grayscale’s accumulation spree might hinder Bitcoin’s attempt to reclaim $40,000 or the levels above it, adding that “the near-term balance of risks is still skewed to the downside.”
BITCOIN DESCENDING TRIANGLE
The bearish fundamental risked activating a classic bearish reversal pattern that has emerged on the Bitcoin charts lately. The BTC/USD exchange rate has been forming a sequence of higher lows on repeated upside rejections while holding its footing at a horizontal support area. The pattern appears like a Descending Triangle.
Most traders look to open a short position following a high-volumed breakdown from the pattern’s lower trendline support. Typically, the price target is as much as the Triangle’s maximum height. In Bitcoin’s case, it is more than $11,000 that puts the cryptocurrency at risk of slipping below $20,000.
Nevertheless, certain adjustments to the support trendline change the entire bearish setup by turning Descending Triangle into a Bull Pennant.
The Pennant’s upside target is as high as the flagpole formed before it (~$20,000). That puts Bitcoin en route to at least $50,000 should the bullish bias sustain.
BTC/USD was trading above $32,000 at the time of this writing.