Aaryamann Shrivastava
FXStreet
- Bitcoin price trading at $24,450 hints at the formation of a bearish fractal.
- The bearish divergence forming on BTC could lead to the price falling to $23,000 before rallying toward $26,978.
- If the pattern fails and the king coin falls below $21,410, the bullish thesis would be invalidated.
Bitcoin price rose by nearly 10% in the last 24 hours to bring the trading price to $24,460. While many assume this is all the fuel the king coin has in its bullish tank, BTC suggests a different possibility.
Bitcoin looking at a further rally
Bitcoin price over the last few days has formed a bearish divergence, with the cryptocurrency forming higher highs while lower lows form on the Relative Strength Index (RSI). Bearish divergences usually suggest a change in trend from uptrend to downtrend which could mean that BTC’s ongoing rally might be invalidated.
However, there is more to Bitcoin than meets the eye. A similar pattern was noted back in April 2019 as well, when the bearish divergence succeeded with a minor dip. Following this, the king coin rallied nearly 69% over the next month. A bearish fractal is formed if a similar pattern is considered for current BTC prices.
Bitcoin bearish divergence in April 2019
The presence of an upward arrow on the Alligator indicator also verifies this bearish fractal. Bearish fractals usually indicate an incoming decline in the asset price, which, if it turns out to be true for BTC, would result in a repeat of 2019’s pattern.
Should the fractal play out, there is a strong possibility for a rally in Bitcoin price. Considering a similar 68.5% rise in value this time, BTC would climb to $41,256 by the end of the following month.
BTC/USD 1-day chart
But on a more practical scale, a bullish momentum would enable the king coin to breach through the immediate resistance at $25,419 and test the critical resistance at $26,978. Flipping it into support would give the cryptocurrency the boost it needs to tag $30,000.
Although should the fractal fail, a decline is also on the cards for Bitcoin price. BTC could lose the support of $23,782 and decline to the critical support at $21,467. A daily candlestick close below this line would invalidate the bullish thesis and bring the king coin down to $18,289, marking a 25% crash.
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