Originally published on: October 23, 2024
Bitcoin is currently facing a 3% decline following a strong performance last week, with concerns rising about the possibility of a re-test of the $60,000 level. The daily chart for Bitcoin is showing a bearish engulfing pattern, a historically significant indicator of a potential reversal.
In the past seven months, every bearish engulfing pattern near a range high has led to a significant correction for Bitcoin. This trend has been consistent, with each subsequent drawdown becoming deeper than the last. The latest bearish engulfing pattern on Oct. 21 has added to these concerns.
The futures and derivatives market has also had a significant impact on Bitcoin’s recent price action, with open interest exceeding $40 billion. However, negative spot orderbook CVD continues to be a point of concern, indicating a lack of spot buyers on exchanges.
Institutional investors seem to be pulling back slightly, with US ETF registering outflows of $79.1 million on Oct. 22. This comes after a series of net negative ETF inflows in early October. Despite reaching an all-time high of $65 billion in total assets under management, Bitcoin is struggling to break above key resistance levels.
As the bearish trend for Bitcoin continues, investors and traders should conduct their own research and be cautious with their investment decisions. The cryptocurrency market remains volatile, and careful consideration is necessary for successful trading strategies. Stay informed and subscribe to our newsletter for more critical insights and market updates.