In recent days, Bitcoin has shown signs of a potential reversal, with the cryptocurrency charting three consecutive green daily candles. The last time such a pattern was observed was early July and between mid and late June, when Bitcoin rallied from just under $25,000 to over $31,000. This shift in price dynamics has led to a change in market sentiment, with the bearish outlook slowly giving way to a more bullish perspective.
While Bitcoin has successfully averted the confirmation of a double top on the 1-week chart fo the moment, this price action has fueled discussions among analysts about the possibility of Bitcoin forming a double bottom pattern, a significant technical indicator.
A double bottom is a classic technical analysis pattern that signifies a potential trend reversal from bearish to bullish in markets. It is characterized by two distinct troughs or lows in the price chart, separated by a peak or a minor high in between. The pattern resembles the letter “W,” with the first trough indicating a significant low, followed by a temporary rebound, and then a second trough, usually near the same price level as the first. A valid double bottom is confirmed when the price breaks above the peak or resistance level between the two troughs, signaling a potential upward trend reversal.
Rekt Capital, a renowned crypto analyst, recently shared his insights suggesting that Bitcoin’s current price pattern in the weekly chart resembles a double top, which typically indicates a bearish reversal. This pattern is characterized by an ‘M’ shape. However, for this to be confirmed, the price would need to break down from the $26,000 support. At press time, Bitcoin was trading at $26,618, successfully fending off the double top validation at the moment.
On the flip side, a double bottom, which forms a ‘W’ shape, would require Bitcoin to rebound from the $26,000 mark and tweeted today, “Could this BTC Double Top actually be a Double Bottom? And the simple answer is – technically, yes. […] But for BTC to form a Double Bottom, it would need to rebound from $26k and rally to $30.6k (which is its validation point).”
He further highlighted the challenges Bitcoin faces, noting the uncertainty surrounding the $26k support level and the numerous confluent resistances ahead, which might hinder the completion of the double bottom formation. Rekt Capital elaborated on the significance of the $26,000 level, tweeting, “It looks like BTC may be choosing the ‘relief rally’ route first in an effort to potentially turn old support into new resistance. The black Monthly level (~$27,200) is approximately confluent with the Bull Market support band as well.”
He also pointed to Bitcoin’s recent bearish monthly candle close for August, emphasizing that Bitcoin closed below approximately $27,150, thereby confirming it as a lost support. Therefore he warns that the current price move by Bitcoin could only be a relief rally to confirm $27,150 as new resistance before dropping into the $23,000 region.
“It’s possible BTC could rebound into ~$27,150, maybe even upside wick beyond it this September. […] $23,000 is the next major Monthly support now that ~$27150 has been lost,” he remarked.
So it’s clear that BTC has a major resistance level of $27,150 to break before the bulls can even dream of confirming a double bottom pattern. But there are also other key resistances to overcome before $30,600 can be breached and the double bottom confirmed.
On-chain analysis firm CryptoQuant emphasized the role of short-term Bitcoin holders, who often provide the liquidity for significant price movements. According to their data, the break-even price for these holders lies between $27,500 and $29,000. If Bitcoin remains below these levels for an extended period, these holders might be incentivized to sell, potentially exerting downward pressure on the price:
On the 4-hour time frame, BTC needs to overcome three major resistances: $26,857 (38.2% Fibonacci retracement level), $27,365 (23.6% Fibonacci retracement level) and $28,186 (post-Grayscale high from August 29th).
While Bitcoin has successfully averted the confirmation of a double top on the 1-week chart fo the moment, this price action has fueled discussions among analysts about the possibility of Bitcoin forming a double bottom pattern, a significant technical indicator.
Bitcoin Double Bottom In The Making?
A double bottom is a classic technical analysis pattern that signifies a potential trend reversal from bearish to bullish in markets. It is characterized by two distinct troughs or lows in the price chart, separated by a peak or a minor high in between. The pattern resembles the letter “W,” with the first trough indicating a significant low, followed by a temporary rebound, and then a second trough, usually near the same price level as the first. A valid double bottom is confirmed when the price breaks above the peak or resistance level between the two troughs, signaling a potential upward trend reversal.
Rekt Capital, a renowned crypto analyst, recently shared his insights suggesting that Bitcoin’s current price pattern in the weekly chart resembles a double top, which typically indicates a bearish reversal. This pattern is characterized by an ‘M’ shape. However, for this to be confirmed, the price would need to break down from the $26,000 support. At press time, Bitcoin was trading at $26,618, successfully fending off the double top validation at the moment.
On the flip side, a double bottom, which forms a ‘W’ shape, would require Bitcoin to rebound from the $26,000 mark and tweeted today, “Could this BTC Double Top actually be a Double Bottom? And the simple answer is – technically, yes. […] But for BTC to form a Double Bottom, it would need to rebound from $26k and rally to $30.6k (which is its validation point).”
He further highlighted the challenges Bitcoin faces, noting the uncertainty surrounding the $26k support level and the numerous confluent resistances ahead, which might hinder the completion of the double bottom formation. Rekt Capital elaborated on the significance of the $26,000 level, tweeting, “It looks like BTC may be choosing the ‘relief rally’ route first in an effort to potentially turn old support into new resistance. The black Monthly level (~$27,200) is approximately confluent with the Bull Market support band as well.”
He also pointed to Bitcoin’s recent bearish monthly candle close for August, emphasizing that Bitcoin closed below approximately $27,150, thereby confirming it as a lost support. Therefore he warns that the current price move by Bitcoin could only be a relief rally to confirm $27,150 as new resistance before dropping into the $23,000 region.
“It’s possible BTC could rebound into ~$27,150, maybe even upside wick beyond it this September. […] $23,000 is the next major Monthly support now that ~$27150 has been lost,” he remarked.
More Resistance Levels For BTC Price
So it’s clear that BTC has a major resistance level of $27,150 to break before the bulls can even dream of confirming a double bottom pattern. But there are also other key resistances to overcome before $30,600 can be breached and the double bottom confirmed.
On-chain analysis firm CryptoQuant emphasized the role of short-term Bitcoin holders, who often provide the liquidity for significant price movements. According to their data, the break-even price for these holders lies between $27,500 and $29,000. If Bitcoin remains below these levels for an extended period, these holders might be incentivized to sell, potentially exerting downward pressure on the price:
On the 4-hour time frame, BTC needs to overcome three major resistances: $26,857 (38.2% Fibonacci retracement level), $27,365 (23.6% Fibonacci retracement level) and $28,186 (post-Grayscale high from August 29th).
