Bitcoin price continued its strong bearish trend on Friday morning as risks in the crypto market rose. BTC tumbled to $81,000, making it the worst-performing major asset. This article explores why the coin may continue falling as it has formed major bearish patterns on the weekly chart.
Bitcoin Price Technical Analysis Points to a Plunge
The weekly timeframe chart shows that the Bitcoin price has crashed from the all-time high of $126,300 to the current $81,950.
A closer look shows that some major bearish catalysts have happened. For example, it has formed a giant rising wedge chart pattern whose two lines neared their convergence in October last year.
After that the coin has formed a bearish flag pattern, which is made up of a vertical line and a channel. It has now moved below the lower side of the channel, confirming a bearish breakdown.
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The coin has moved below the 50-week Exponential Moving Average (EMA) and the Supertrend indicator. It also fell below the 38.2%Fibonacci Retracement level at $83,000.
Therefore, the most likely scenario is where the coin continues falling as sellers target the next key support level at $70,250, its lowest level in April last year, and the 50% Fibonacci Retracement level.
Bitcoin’s rebound will only be confirmed if it moves above the key resistance levels at $97,865 and the psychological level at $100,000.
BTC price faces risks | Source: TradingView
BTC Price Faces Major Risks
The ongoing Bitcoin price crash is happening because of several major risks. First, there is a risk that Donald Trump will appoint Kevin Warsh, who is crypto-skeptical, to be the next head of the Federal Reserve.
In reality, a Fed Chair has no major say in the crypto industry. However, the narrative may hurt the industry in the near term as market participants were expecting him to announce Rick Rieder, who is a well-known proponent of the industry.
The other major risk is that Trump is gearing to attacking Iran, a move that will have major implications, including rising geopolitical risks and higher crude oil prices. Higher prices may lead to more inflation, making it more difficult for the Fed to cut interest rates.
Additionally, Bitcoin futures open interest has continued falling in the past few days. It stood at $60 billion, down from the year-to-date high of over $66 billion. At the same time, Bitcoin liquidations have continued soaring in the past few days.
BTC ETF outflows | Source: SoSoValue
Bitcoin ETF demand has continued to wane in the past few months. The funds have shed assets in the past three consecutive months, a trend that may continue in the coming weeks.
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