Bitcoin (BTC) Price Drops To $27,000, Will The Decline Stop Here?
The price of Bitcoin (BTC) is currently trading within a bearish pattern and has broken below the most recent horizontal support area. It is expected that the price of BTC will continue to decrease in the coming days.
Ascending Parallel Channel
The Bitcoin price has been rising within an ascending parallel channel since bouncing up from the $25,400 support area on September 11. This move allowed the price of BTC to retest the previous crucial support area at $28,600 on October 2, a common development after a breakdown.
Indeed, the price was rejected on the same day (red arrow) and has been declining since. This rejection coincided with the BTC price hitting the resistance line of the parallel channel. Currently, BTC is retesting the support line of the channel.
Because the gradually rising parallel channel is considered a bearish pattern, it often leads to breakdowns in most cases.
Breaking below this channel will confirm that this upward move was just a recovery within a downtrend and the price is expected to drop back to the starting point of the recovery.
In Bitcoin’s case, it is anticipated to drop to the significant support area of $25,400.
The daily RSI indicator is currently in the process of breaking below the bullish divergence trendline and the 50 level. If successful, it will confirm the BTC trend is bearish.
Short-term Outlook
The 4-hour chart indicates that BTC will break below the ascending parallel channel on the daily chart. This is because the price has broken below a short-term descending triangle pattern today.
This pattern has a target of $25,800, calculated by measuring the height of the pattern and adding it to the breakdown point.
Because this target coincides with the horizontal support area at $26,000, it might provide a bounce once touched.
Conclusion
The most likely scenario suggests that the price of BTC will decrease further in the coming days. The nearest target is $25,800-$26,000 and potentially lower towards $25,400.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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