Bitcoin Fractal Highs Increase Downside Risk by 38%
A closer look at Bitcoin’s weekly price chart suggests that the cryptocurrency may mirror previous market trends.
The areas highlighted in red on the chart represent local peaks where Bitcoin’s price faced significant resistance.
Notably, these areas align with overbought conditions on the Relative Strength Index (RSI), leading to sharp declines.
Currently, Bitcoin’s RSI is showing similar overbought signals, having formed lower highs even as the price reached higher levels – a classic bearish divergence.
This pattern indicates a weakening of bullish momentum, which, if it plays out as it did during previous cycles, could lead Bitcoin’s price towards the 200-week exponential moving average (EMA), a critical support level of around $ 36.750, down about 38% from the current level. price levels.
On the contrary, the price of $BTC could undergo a bullish reversal from its 50-week EMA (the red wave) if its RSI sustains above 41, its predominant support level.
