Bitcoin (BTC) is at a pivotal level as geopolitical tensions rise and bearish setups emerge, prompting some analysts to warn of a potential 15% correction if a critical support area doesn’t hold.
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Bitcoin Eyes Channel Support For Next Move
Following news of renewed US strikes against Iranian targets, Bitcoin dropped roughly 5% from $76,000 to a one-month low of $72,589. At the start of the week, the cryptocurrency had been trading between $77,000-$78,000 after recovering from last week’s pullback. However, the growing geopolitical tensions have pushed the price toward a critical area.
Analyst Ali Martinez affirmed that BTC reached a major support zone after losing the $75,000-$76,000 area. He previously said that leading crypto has been consolidating inside an ascending channel that has been developing since the early February crash, with two crucial levels likely to define the direction of its next move.
As he explained, if Bitcoin broke above the $78,258 resistance, it could trigger a rally toward the $84,000 barrier, while breaking below the $75,733 support could push the price toward the late March-early April lows.
Now, the price is consolidating at the lower boundary of the ascending channel, which could set the stage for a 15% drop. According to the post, the channel’s floor aligns with the 100-day Simple Moving Average (SMA) and the 23.6% Fibonacci retracement level, making the current price levels a crucial area.
“This cluster between $73,000 and $71,300 serves as a major structural floor,” he stated, noting that if buyers defend this zone, a “steady expansion back toward $77,000 or even $79,500” could be expected.
On the contrary, he warned that if Bitcoin loses the $71,300 flows, “it would open the door to an extended value window near the February base of $60,000.”
BTC Bearish Setup Signals Risk Of Further Decline
Market observer Mister Crypto shared a bearish outlook on the flagship crypto, citing a textbook bearish formation on BTC’s daily chart. According to the trader, Bitcoin has been forming a Head and Shoulders pattern since mid-April, with the setup’s neckline around the $75,000 level.
The chart shows that the cryptocurrency formed the left shoulder during the late April pullback and later developed the head during this month’s rally. Meanwhile, the pattern’s right shoulder began forming after the rejection from the $82,500 resistance.
The trader affirmed that the pattern is playing out “almost perfectly,” which “confirms the bearish thesis” and suggests a drop to lower levels may be around the corner. “Now that we have broken back into the range after losing $75,000, the probability of a move toward the range lows around $63,000 is increasing,” the analyst wrote.
Similarly, analyst Daan Crypto Trades noted that Bitcoin is “putting in a similar reaction after that horizontal level and Daily 200MA/EMA retest compared to January this year.”
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Notably, BTC consolidated above the early November lows for roughly two months before rallying mid-January toward the 200-day Exponential Moving Average (EMA) and the crucial $98,000 horizontal level. The cryptocurrency was rejected from this area, briefly consolidating near the local lows before breaking down toward new lows.
Now, the price has seen a similar performance, retesting and rejecting from both the horizontal $80,000 level and the 200-day MA and EMA. As a result, the analyst considers that BTC will see “another lower high in the bigger down trend until proven otherwise.”
Featured Image from Unsplash.com, Chart from TradingView.com
