Bitcoin price had registered 9 bearish candles in a row, for the first time in its history. The surge that recently elevated the BTC price above $32,200 had raised some hopes of accumulating a couple of bullish candles. However, the fresh drop that dragged the asset back around $29,500 is not only confirming yet another bearish weekly candle but indicates the bearish pattern may be repeated yet again.
It is a known fact that the ‘death cross’ occurring in the daily or 3-day chart always drains nearly 20% of the value. However, currently, a similar bearish event could occur anytime in the coming week that may have a larger impact than the previous death cross. Bitcoin has just made a bearish cross between the Moving Average(MA)-20 & 100 levels on the weekly timeframe for the first time since the previous bear cycle.
The cross had occurred previously in the 2014 bear cycle as well as the 2018 cycle. Along with the bearish cross, another important historical indicator that is typically seen at the bottoms just flashed a bearish signal. The Gaussian Channel, which measures the volatility of the asset just turned red for the first time since 2019. The indicator had turned red during the previous bearish cycles and drained more than 50% of the value.
Therefore, if the pattern replicates, then Bitcoin price is feared to drop below $20,000 to trade somewhere around $16,000. Additionally, the weekly RSI levels are rebounding on a lower lows pattern, compelling the BTC price to consolidate for a few more weeks within an accumulation phase. This consolidation is expected to find the bottom and pave way for a gradual price recovery by the end of the summer.