Bitcoin, 20% Plunge Signal Appears...Was Breaking $80,000 a Fantasy?

▲ Bitcoin (BTC) Price Drop

Bitcoin (BTC) is encountering strong resistance near its all-time high, with technical indicators unanimously signaling a downtrend, requiring special caution from investors hoping for further gains.

According to crypto media outlet Bitcoinist on April 29 (local time), risk signals are being detected in key technical indicators after Bitcoin's recent attempt to break $80,000 failed. Bitcoinist specifically warned that buying power is weakening in higher time frames, raising the possibility that the current uptrend could be a temporary bull trap (false rally). Market analysts note that Bitcoin has entered an overbought zone in the short term, and historically, large price corrections have followed the appearance of such indicators.

The most concerning aspect is the 'TD Sequential' indicator's bearish signal on the weekly chart. This indicator has currently reached its 9th or 13th count, suggesting that a trend reversal is imminent. Analyst Tony "The Bull" stated, "If Bitcoin fails to firmly establish itself above the psychological resistance level of $80,000, investors should be very cautious." He added, "The current technical setup is not favorable for buyers." He cited past instances where similar signals led to Bitcoin price plunges of about 10% to 20%.

Bearish divergence is also observed in the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD). While the price is making higher highs, auxiliary indicators are showing lower highs, indicating that upward momentum is exhausting. Santiment's on-chain data shows a gradual increase in Bitcoin flowing into exchanges, interpreted as a sign that large investors are preparing to realize profits. This data delivers a cold warning to an optimistic market.

The fact that the overall market sentiment index remains in the 'extreme greed' phase also increases the likelihood of a correction. Historically, markets have often experienced sharp reversals when public optimism peaked. Bitcoinist analyzed that the current virtual asset market has entered a phase where volatility could be maximized, coupled with macroeconomic uncertainties. Investors should keep in mind that if the key support level of $74,000 collapses, the downtrend could accelerate to the low $60,000s.

While Bitcoin maintains a long-term bullish trend, the consensus is that short-term technical overheating needs to be resolved. Analysts recommend waiting for the market to undergo sufficient price correction and confirm support levels rather than rushing into aggressive buying. This is a warning that ignoring current risk signals and engaging in aggressive investment could lead to significant losses. Bitcoin is expected to continue a fierce tug-of-war until the weekly closing price is confirmed this week, determining its future direction.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*