As earlier attempts to reclaim its ATH have been thwarted by sellers, bitcoin is now at a risk of steeper declines.
Bitcoin slid by more than 4% dragging its price to $61,000 on Monday. This bearish trend could intensify as the leading cryptocurrency appears to be forming a double-top pattern while testing its support level.
The asset dumped below a key support level today, which could trigger further declines by over ten grand.
“Time To Panic?”
Bitcoin has witnessed a massive surge this year, triggering rallies in the broader crypto market as well. This uptrend can be largely attributed to the much-anticipated launch of several spot Bitcoin ETFs, which has boosted institutional engagement as well as mainstream acceptance.
However, BTC’s value has fallen since hitting an all-time high of nearly $74,000, and the asset dumped even more in the past 24 hours, falling to a multi-week peak of $61,000. But 10x Research’s latest analysis suggests that more pain could be on the horizon. In fact, BTC might transition from its current $60,000-70,000 trading range into a topping formation, potentially leading to a steeper decline.
Markus Thielen, founder of 10x Research, highlighted $61,500 as a crucial threshold in a note to clients, which the asset fell below earlier today. If it fails to bounce off soo, the cryptocurrency could further plummet to the low of $50,000.
The exec’s note read,
“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.”
Double Whammy for Bitcoin
Bitcoin miners have been under tremendous pressure after the fourth halving event. With breakeven prices significantly higher, they have been forced to liquidate their holdings, which led to a dramatic reduction in BTC held by them.
As revealed by QCP Capital’s recent analysis, the total miner reserves have decreased by a whopping 50,000 BTC since the beginning of the year.
Further exacerbating the market conditions, the German government reportedly sold 3,000 BTC with plans to offload an additional 47,000 BTC in the near future. This was enough to rattle investors and subsequently contributed to the overall bearish sentiment.