Equally the Bitcoin price dropped to sub-$7,000, technical analysts pointed out that BTC bankrupt downward from a crucial trendline dating back to March 16. While markets signal for brusque-term relief, traders foresee a severe pullback occurring for 2 key reasons despite less than three weeks remaining before the much-anticipated Bitcoin halving.

The two compelling cases for a Bitcoin correction in the foreseeable future are a breach of a major trendline signaling overhead resistance and a lower high pattern at a high time frame.

Bitcoin breaks an important trendline dating dorsum 40 days. Source: TraderXO

Challenging for Bitcoin to recover on a direct line from near capitulation

Despite theories that advise the Bitcoin price was not supposed to drop beneath $iv,000 during the so-called "black swan" upshot on March 12, BTC spiked from $3,600 to $6,900 on newspaper within a month and a half.

That is a 91% increase in price in precisely 40 days, which is a substantial ascent in price even for Bitcoin whose extreme volatility is well known to investors.

When the Bitcoin price rises so steeply in a short flow of time with no major pullbacks, it is oft left vulnerable to a significant retracement. As seen in Oct and Dec 2022, the Bitcoin price can surge by 100 per centum and nevertheless fall back to where the rally began faster than the upward cost motility.

Diverse momentum oscillators suggest that the Bitcoin price has room for a relief rally in the almost-term, possibly to the $vii,100 to $7,200 range. Just, the clean germination of a lower low on the daily nautical chart of the Bitcoin price suggests that buyers are beginning to lose control over the market place.

For the first time since the Bitcoin cost dropped to $iii,600, the daily chart of BTC printed a textbook lower depression. Before the rejection of $7,400 and $7,200 in quick succession, buyers were conspicuously more than ascendant than sellers in the Bitcoin marketplace.

Dips to the downside were small and bought upwardly quickly, every bit buy orders dwarfed sell orders across both spot and futures exchanges. Yet, the severe rejection of $7,400 reversed the trend, creating a hard environment for buyers to retain dominance.

Bitcoin prints a lower low for the outset time in the by 2 months. Source: Byzantine General

As Cointelegraph reported final calendar week, the technically bearish structure printed on the Dow Jones Industrial Average with the appearance of the TD9 sell indicator could add selling pressure on most loftier-risk assets that include Bitcoin.

There are variables to foreclose a big crash

Although some key technicals remain bearish, two fundamental factors could also preclude Bitcoin from retesting the $4,000 lows in the short-term and stabilize the market.

Get-go, the arrival of majuscule into Tether, the almost widely utilized stablecoin in the global market, is rapidly increasing. If billions of dollars of Tether parked on exchanges in the likes of Binance first to re-enter the cryptocurrency marketplace and flow into Bitcoin, it could protect BTC from more downside.

Second, culling cryptocurrencies like Ethereum and exchange tokens take been rallying in tandem with BTC in the last several upsurges.

Both factors may potentially indicate that existing investors are willing to take on more gamble out of growing confidence towards the market trend and protect Bitcoin from seeing another leg down in the upcoming weeks.