Bitcoin Price Faces Bearish Reversal Signal After Failing to Break Key Resistance
Bitcoin’s price movement has raised concerns as it shows bearish signals after failing to break a crucial resistance level. According to analyst RLinda’s analysis shared on TradingView, the formation of a bearish engulfing pattern suggests that Bitcoin may be reversing last week’s upward trend and experiencing a significant pullback.
The failure to break the $69,000 mark signifies a bearish reversal for Bitcoin
RLinda’s analysis of Bitcoin’s price movement is based on the formation of a new bearish engulfing candlestick pattern within the daily candlestick chart timeframe. Last week, Bitcoin experienced a significant rebound, pushing the cryptocurrency into a strong buying zone around $68,900.
Despite the strong momentum, Bitcoin bulls failed to push the price above the $69,000 resistance zone and faced multiple rejections during the cryptocurrency’s attempt to reach that level.
RLinda’s analysis points out that the inability to break higher levels resulted in the formation of three consecutive bearish engulfing patterns on the daily candlestick chart, indicating a possible resurgence of control by sellers.
A bearish engulfing pattern, where the latest candle completely engulfs the previous day’s candle, is a strong reversal signal indicating that the upward momentum has been exhausted. This pattern, combined with the failure to break the $69,000 region, suggests that Bitcoin may face a deeper pullback.
RLinda further emphasizes that the recent rebound appears to be a false breakout of the descending resistance trendline that has been limiting Bitcoin’s price increase since it reached its all-time high of $73,737. Since March, the descending trendline has been the upper limit of Bitcoin’s price surge. Although last week’s rebound initially seemed to break this trend, the subsequent rejections indicate that the breakout was not sustainable.
In light of this, the analyst points out that Bitcoin has now returned to a consolidation phase slightly below this trendline. As Bitcoin continues to consolidate, the risk of further pullbacks increases.
How far can the Bitcoin price adjustment go?
Looking ahead, RLinda expects a potential pullback in Bitcoin’s price, with the first downside target set around $65,000. If this level fails to hold, further pullbacks could lead to Bitcoin dropping to $61,000, $58,000, or even $57,000.
However, this bearish outlook is not set in stone. RLinda adds that if Bitcoin successfully breaks above $69,400, the bearish structure may become invalid. Breaking this level would ensure a bullish momentum and sustained breakthrough of the descending triangle.
At the time of writing, Bitcoin is trading at $66,670, down 0.6% in the past 24 hours. The current price trend aligns with RLinda’s prediction of consolidation below the descending resistance trendline.
Meanwhile, the coming days may determine the closing price of Bitcoin in October (Uptober) within the green zone. Notable resistance levels to watch are $66,500 and $65,000, while notable support levels are $68,400, $69,400, and $71,500.
BTC price remains below $67,000.
