Popular cryptocurrency trader Keith Wareing warned Bitcoin (BTC) traders of a critical downside scenario brewing in the market.
The dealer sighted Bitcoin within an inverse cup-and-grip pattern earlier this month, a bearish structure that forms during a downward price surge, followed by a stabilization phase. The technical design usually leads the price by the extent of the previous decline.
Bitcoin hit nearly $ 65,000 in mid-April before going down again in later sessions. The cryptocurrency tumbled as low as $ 28,800 on June 22, after repeatedly trying to keep prices above $ 30,000. It did so successfully, but failed to extend its bullish reversal momentum after facing relatively higher selling pressures in the $ 35,000 to $ 36,000 range.
The handle portion of the pattern appeared to be nearing exhaustion, leading Wareing to state that the price of Bitcoin would fluctuate within the structure for an additional three to four weeks. After that, the cryptocurrency would rebound enough that it could hit $ 24,000.
“If the handle breaks, expect 24k-29k as the new range. […] 3-4 more weeks of area-specific Imo ”, wareing wrote in an update on Friday.
Negative outlook for riskier assets
Bearish warnings for Bitcoin gained momentum in the weeks after global regulators stepped up crackdown on the cryptocurrency sector. In China, for example, following Beijing’s 2018 restriction on cryptocurrency trading, the central bank effectively banned all forms of crypto-related activities, including mining, one of the few surviving crypto industries.
Meanwhile, Binance, the world’s leading cryptocurrency exchange by volume, has come under pressure from regulators in the UK, Thailand, Canada, Japan and the Cayman Islands for its sprawling crypto operations.
The UK’s Financial Conduct Authority banned Binance from all regulated financial activities last month. This prompted Barclays, Faster Payments and Santander to block their bank customers from accessing Binance.
Alongside traditional markets, BTC / USD bids also fell on mounting worries about the global economy, especially after days of strong movements in government bonds indicated slower growth and inflation than previously expected.
“We are seeing a shift in asset allocation, with people across the board selling risky assets and investing in the safer returns on government bonds,” said Shaniel Ramjee, senior investment manager at Pictet Asset Management, after US 10-year Treasury yields fell on Thursday for the first time since February 2021 to only 1.276%.
Yields fall when bond prices rise.
Clem Chambers, CEO of financial analyst firm ADVFN, suggested that bulls should wait for a crash before diving back into the Bitcoin market, noting that the next best chance of accumulation comes when the cryptocurrency drops to $ 20,000.
Still, the bulls remained hopeful that the growing appreciation of Bitcoin in the mainstream space, especially against lingering fears of higher inflation, would bring the cryptocurrency out of its bearish slumber.
“Bitcoin has been trapped in a long and narrow (8%) trading range of $ 32,500 to $ 35,000 for most of the past 3 weeks.” said Ronnie Moas, founder of Standpoint Research.
“I see a 20% disadvantage down [on] China, GBTC lockdown or other negative headlines [but] 150% uptrend by year-end in an exchange traded fund admission, some other positive headlines, [and] supply-side shock. “
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