Bitcoin bearish continuation setup could be a trap as BTC positoined for a drop to $35,000

Bitcoin price action shows that some very bearish price action may be coming up soon. Both the Japanese candlestick charts and two Point and Figure charts show dangers to the downside – but follow-through by sellers is necessary and has yet to happen.

Bitcoin price shows multiple, bearish setups across the board

Bitcoin price, from a Point and Figure perspective, shows little in the way of bullish price action. On the $1,000/3-box reversal and $500/3-box reversal Point charts, significant short setups are present.

The $1,000/3-box reversal chart has a triple-bottom setup with a bullish fakeout setup, pointing to a return to the $37,000 price level. Likewise, the $500/3-box reversal chart shows a return to $37,000 from a split quintuple bottom pattern.

BTC/USD $1,000/3-box Reversal Point and Figure Chart (left) and $500/3-box Reversal Point and Figure Chart (right)

If $46,000 fails to hold as support, sellers may be enticed to enter. However, a drop to the $43,000 to $44,000 zones may bring in buyers and create a new support zone. In that scenario, Bitcoin price would be in the process of developing several bear trap patterns in Point and Figure analysis.

For bulls to essentially deny further downside pressure, they would need to push Bitcoin price to a close that puts it above the Tenkan-Sen, Kijun-Sen, and puts the Chikou Span above the candlesticks. For those three conditions to be true, Bitcoin needs to close at or above $50,225.

BTC/USD Daily Ichimoku Chart

From there, the final hurdle for Bitcoin price on the daily Ichimoku chart is a close above the Cloud at or above $55,500 – the march towards new all-time highs could then begin.