Bitcoin Could Drop To $40,600 If This Happens, Crypto Analyst Says
05 September 2024 - 12:00PM
NEWSBTC
An analyst has explained how Bitcoin could witness a drop to the
$40,600 level based on a pattern forming in its 2-month price
chart. Bitcoin Has Seen A TD Sequential Sell Signal On Its 2-Month
Price In a new post on X, analyst Ali Martinez has discussed about
a Tom Demark (TD) Sequential signal that has formed in the 2-month
price of Bitcoin. The TD Sequential is an indicator in technical
analysis (TA) that’s generally used for spotting positions of
probable reversal in any asset’s price. This indicator involves two
phases: setup and countdown. In the first of these setups, candles
of the same color (that is, whether red or green) are counted up to
nine. After these nine candles are in, the asset could be assumed
to have reached a point of turnaround. Related Reading: Bitcoin
Investors Beware: MVRV Has Given Bear Market Signal Naturally, if
the candles that led to the setup’s completion were green, then the
TD Sequential would give a sell signal. Similarly, red candles
could suggest a bottom may be here. Once the setup is done with,
the second phase of the indicator, the countdown, begins. The
countdown works much like the setup, with the main difference being
that candles here are counted up to thirteen, instead of nine.
Following these thirteen candles, the asset may be considered to
have reached another potential top or bottom. Bitcoin has completed
a TD Sequential phase of the former type recently. Here is the
2-month price chart of the cryptocurrency shared by the analyst,
which shows this signal: As displayed in the above graph, the
Bitcoin 2-month price has recently finished a TD Sequential setup
with nine green candles, implying that the cryptocurrency may have
encountered some kind of top. Since the signal has appeared, BTC
has been on the way down, with its price currently under the
$57,000 level. Thus, it’s possible that this pattern’s bearish
effect may already be taking hold. As for how deep this drawdown
can take Bitcoin, Martinez has pointed out the support level at
$51,000. This level corresponds to the 0.236 Fibonacci Retracement
level from the recent BTC top. Related Reading: Bitcoin, XRP See
Declining Whale Activity: What It Means Fibonacci Retracement
levels are based on the Fibonacci series, where dividing each
number (beyond 5) in the series by the next numbers produces ratios
that are consistent throughout the series. It’s possible that
Bitcoin may find support at the next such important ratio, but the
analyst notes that if the $51,000 support gets breached, the
cryptocurrency could end up going all the way down to $40,600,
which corresponds to the 0.382 Fibonacci Retracement level. In the
scenario that BTC does end up revisiting this level, its price
would have gone through a drawdown of more than 28% from the
current level. It now remains to be seen how the asset’s trajectory
plays out from here. BTC Price Bitcoin has furthered its latest
decline during the past day as its price has now slipped to
$56,600. Featured image from Dall-E, charts from TradingView.com
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