Bitcoin, $30,000 Evaporates?...Worst Collapse Line Appears in Bear Flag

▲ Bitcoin (BTC)

Claims that Bitcoin (BTC) is forming a textbook bear flag have emerged, along with the possibility of a $30,000 plunge. The warning states that if the price fails to overcome key moving average resistance and loses the bottom of the ascending channel, the downside target could open up to the $50,000 to $55,000 range.

Bitcoinist reported on May 5, citing an analysis shared by cryptocurrency trader 0xPepesso on X (formerly Twitter), that Bitcoin is forming a bear flag structure on the daily chart. This pattern is a bearish continuation structure that appears when a gradual ascending channel follows a previous sharp drop. If confirmed, up to $30,000 could disappear from the current price level, according to the analysis.

0xPepesso observed that Bitcoin sharply dropped from around $98,000 to approximately $60,000 earlier this year, forming the flagpole of the pattern, which represents the initial decline. Subsequently, instead of rapidly recovering, the price followed a gradual upward channel to around $80,900. Bitcoinist reported that this movement could be interpreted as a temporary correction within a larger downtrend rather than a trend reversal.

Key resistance lies at the 100-day and 200-day exponential moving averages, clustered around $78,500. These moving averages often act as dynamic resistance during bearish phases. A price action remaining below this zone reinforces a bearish interpretation, suggesting that selling pressure still holds dominance and buying pressure is insufficient to reclaim higher price levels.

If Bitcoin fails to break through the confluence of moving averages and breaks below the bottom of the ascending channel, the bear flag structure could be confirmed. In technical analysis, this scenario anticipates a further decline of a similar magnitude to the preceding drop, with a downside target projected between $50,000 and $55,000. Calculated from the $78,500 resistance area, this implies a potential drop of approximately $25,000 to $30,000.

However, the bearish scenario also has invalidation criteria. If Bitcoin forms a strong daily close above the 200-day moving average, the bear flag structure would weaken, and upward momentum could revive. In this case, a short squeeze could occur, pushing the price up to the $85,000 to $88,000 range. Bitcoinist stated that until the price trend decisively changes, the bearish scenario remains a key market observation point amidst limited macroeconomic support.

*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.*