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Bitcoin Bull Flag Falters: Can BTC Hold Above $44,000 or Plunge Towards $40,000?


Bitcoin’s recent surge towards $48,800 seems like a distant memory as the king of crypto faces a potential downturn. Nick is warning of a correction brewing, with signs pointing towards a retreat that could test key support levels and send BTC as low as $40,000.

Technical Cracks in the Bullish Facade:

The chart paints a concerning picture. Bitcoin has hit a local top and is showing signs of weakness. Both the 50 EMA and 50 SMA, currently around $44,550 and $44,470 respectively, are potential targets for the downtrend. A potential dip below these levels could trigger further selling pressure, pushing BTC towards a support range between $43,919 and $44,398.

Elliott Wave Whispers and Bearish Divergence:

Elliott Wave analysis suggests Bitcoin may be in a corrective phase within a larger bullish structure. Fibonacci retracement levels also hint at a potential bounce around $44,750 if BTC manages to break above $44,879. However, bearish divergence on the hourly chart and an overbought Stochastic RSI point towards a higher likelihood of a price drop.

Daily Timeframe: Higher Highs, Hidden Lows?

Zooming out to the daily timeframe reveals a potentially bearish setup with higher highs and higher lows. This pattern could lead to a further decline, extending the correction.

Volume Speaks Volumes (or Lack Thereof):

Adding fuel to the bearish fire is the dwindling volume across major exchanges like Binance. This suggests the recent price push wasn’t fueled by strong buying pressure, potentially making it vulnerable to a correction.

Historical Precedents and Supply Squeeze:

Historically, Bitcoin corrections have ranged around 10%, and the current overbought conditions could trigger a similar pullback. On the flip side, reduced supply due to increased withdrawals from exchanges could help cushion the fall.

The ETF Elephant in the Room:

The looming launch of Bitcoin spot ETFs throws another wildcard into the mix. Their impact on supply and demand remains uncertain, potentially boosting the price to new highs or triggering a “sell the news” event.

Personal Conviction in Uncertain Times:

Navigating this potential storm requires careful consideration. Analyzing charts, volume profiles, and on-chain metrics can provide valuable insights, but ultimately, your personal conviction will guide your investment decisions. Whether you believe this is a temporary dip or the beginning of a deeper correction, stay informed, manage your risk, and adapt your strategy as the market unfolds.

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