Bitcoin price analysis: Another bearish flag pattern in play
|- Reaction to the short-bearish flag pattern could send Bitcoin back below $3,500.
- Bitcoin volatility is still high even as the market stays stable.
The market has been stable since the devastating drop last week. However, Bitcoin volatility is still high. The asset succumbed to another drop on Tuesday this week where after it was rejected from $3,680. The bullish flag pattern we explored in the price analysis then failed to breakout resulting in an extended breakdown that tested the short-term support at $3,560.
While the correction towards $3,700 has been limited, Bitcoin buyers pushed the price higher above $3,640. The bearish flag pattern formed saw Bitcoin correct lower as expected. At the moment, BTC/USD is trading below the 50-day Simple Moving Average in the 1-hour range. BTC is valued at $3,584.20 while there is an ongoing bear momentum as seen in the chart.
The bear momentum is an expected reaction to the short-term bearish flag pattern. It is likely that that Bitcoin will continue to trend lower in the coming sessions of the day. The Relative Strength Index (RSI) is on verge of exploring the oversold territory. This means that the bears are back and in full gear. However, a couple of support areas at $3.560 and $3,540 will come in handy to rescue the bulls from the impending downfall.
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