Bitcoin (BTC), the world’s leading cryptocurrency by market capitalization, is currently exhibiting a bearish trend, which could potentially lead to a significant price decline in the upcoming hours or days. As of October 18, 2024, BTC has shown signs of a potential price correction by forming a bearish candlestick pattern at a well-established resistance level.
Bitcoin (BTC) Technical Analysis and Upcoming Levels
Expert technical analysis indicates that BTC is encountering strong resistance at the upper boundary of a descending channel pattern. Since March 2024, Bitcoin has approached this level multiple times, exceeding six instances, each followed by substantial selling pressure and a price decline exceeding 20%.
The daily time frame reveals the formation of a bearish engulfing candlestick pattern, suggesting the likelihood of a similar price decline in the near future. On a closer examination of the four-hour timeframe, Bitcoin is currently finding support at approximately $66,700. Over the past two trading days, BTC has been consolidating within the $66,700 to $68,000 range.
Considering recent price momentum, if BTC breaches the lower boundary of this consolidation zone and closes a daily candle below the $66,500 mark, there is a strong possibility that the asset could experience a decline exceeding 6%, potentially reaching the $62,500 level.
Bearish Sentiment Confirmed by On-Chain Metrics
The negative outlook for BTC is further reinforced by on-chain metrics. According to data from on-chain analytics firm Coinglass, BTC’s Long/Short ratio currently stands at 0.968, reflecting a bearish sentiment among traders. Additionally, there has been a 3.43% decline in future open interest over the last 24 hours, accompanied by a 1.85% drop in the same timeframe.
This reduction in open interest suggests that traders may be liquidating their long positions or exiting the market, likely due to concerns over a potential price crash. When these on-chain metrics are combined with technical analysis, it becomes evident that bearish forces are currently dominating BTC, with the potential to initiate a significant price decline.
Current Price Momentum
As of the latest update, Bitcoin is trading near $66,920, having experienced a price decline exceeding 1.8% over the past 24 hours. During this period, trading volume has decreased by 21%, indicating reduced participation from traders, likely due to prevailing market sentiment.
In conclusion, Bitcoin’s current technical and on-chain analysis suggests a bearish outlook, with potential for further declines if key support levels are breached. Traders and investors should exercise caution and closely monitor market developments to make informed decisions.
