Bitcoin price held steady above the important resistance level at $110,000 on Tuesday. However, it remains in a correction after falling by over 12% from its highest point this year. Its technicals suggest that the BTC price may be on the cusp of a strong bearish breakout.
Bitcoin Price Technical Analysis Points to a Crash
The daily chart below shows that Bitcoin price has held steady in the past few days as investors bought the dip. However, the coin has some notable risks that may trigger a crash in the coming days.
One of the risks is that the coin has formed a doji candlestick pattern. This pattern is made up of a tiny body and upper and lower shadows, a sign that it opened and closed at the same level.
The coin has also moved below the 50-day and 200-day Weighted Moving Averages (WMA), and the spread between the two is narrowing. This is a sign that it is about to form a death cross pattern, a common bearish sign.
Bitcoin price has also formed a double-top pattern at $124,500 and a neckline at $107,530, its lowest level on September 1.
READ MORE: Top 5 Reasons Why XRP Price May Spark Higher Soon
Meanwhile, there are also signs that the ongoing recovery is not all that strong. The Trend Strength Index has continued falling, while the Average Directional Index (ADX) has pointed downwards.
Therefore, the most likely situation is where the Bitcoin price resumes the downtrend and possibly hits last week’s low of $103,260. A move below that level will point to more downside, potentially to the psychological point at $100,000.
The bearish Bitcoin price forecast will become invalid if it jumps above the important psychological point at $115,000.
Bitcoin Demand is Softening
The short-term bearish case for Bitcoin price is also backed by its fundamentals. First, there are signs that accumulation by Bitcoin treasuries companies continues to wane this month.
Only Michael Saylor’s Strategy has bought Bitcoin lately, with Metaplanet remaining on the sidelines after the NAV multiple plunged below 1.
Spot Bitcoin ETFs are also struggling. They shed over $1.1 billion in assets under management last week and are down by $40 million this week.
On the positive side, Bitcoin has some macro catalysts that may push it higher. One of them is the upcoming US inflation report, which will help to set the tone for next week’s Federal Reserve decision. A lower inflation figure than expected will help to boost risky assets.
The other macro catalyst is the upcoming talks between the US and China on trade. A deal would remove one of the top headwinds in the market and lead to more downside.
READ MORE: Here’s How the Crashing Pi Network Price Can Still Rebound
