In a current evaluation of the Bitcoin value, seasoned crypto analyst Rekt Capital mentioned the looming presence of a possible double prime formation on the weekly chart. The scenario paints an image of impending volatility, with each bullish and bearish narratives rising from this typically foreboding sample.
“The BTC Double Top still remains intact,” tweeted Rekt Capital, emphasizing the technical construction’s significance. He continues, “Weekly Bearish Divergence lends additional bearish confluence to this structure as well. More, the bear div is developing a new lower high (dotted green) relative to its primary downtrend (solid green).” However, BTC would want to drop an extra -9% to -13% from present costs to finish its potential double prime.
But what makes this evaluation notably intriguing is the present state of Bitcoin’s quantity. Rekt Capital additional observes, “What’s interesting about the volume behind BTC’s price action is that the two recent peaks formed on inclining volume while the RSI formed lower highs.” For many, this simultaneous enhance in quantity with descending RSI hints at underlying market weak spot, an perception additional supported by the following declining quantity after the native prime at roughly $31,000.
Diving deeper in his video evaluation, Rekt Capital highlighted the necessity for a definite “M”-shaped formation, a trademark of the double prime sample. “For Bitcoin to form a double top here, we have to see an ‘M’-shaped formation take place. When we see a M form, that’s essentially a double top. One top here [at $30,800] and one top here [at $31,300].”
Losing pivotal assist ranges may invite substantial downward motion. “Losing this [neckline] level at $26,000 as support would enable further downside,” warns the analyst. However, for merchants and traders hoping for symmetrical habits, Rekt Capital speculates, “And if we see symmetry here, a three month second part of this M could form so that’s going to prompt further downside and just slow bleeding into that 90 day-mark which would be around next month.”
But not all is bleak. Should Bitcoin hint again to $24,000, a retracement would “see us retest the neckline of this inverse head & shoulders that we saw break out.” Rekt Capital provides, “So a retest of this level as a new support should actually enable further upside.”
Also, a take a look at the 1-week chart additionally exhibits that there’s one other state of affairs for the invalidation of the double prime. Bitcoin has fashioned an ascending trendline from its low in early January. Provided BTC can maintain this trendline on a weekly foundation and bounce up from there (at round $28,200), an invalidation would happen. The symmetry of the M can be damaged, the uptrend on the upper time frames may proceed.
Featured picture from iStock, chart from TradingView.com