Renowned cryptocurrency trader Aditya Singh noted in his market commentary today that Bitcoin saw a sharp dump from $45,000, invalidating its recent breakout.
Bitcoin failed to hold support at the key breakdown point of the descending triangle pattern that has been forming over the past month, around $43,500. Instead, the leading cryptocurrency plunged below this level, putting it back inside the triangle after a fake breakout.
The inability to hold above the descending triangle breakpoint confirms the breakout was a bull trap. Bitcoin remains stuck in a month-long descending triangle, pointing to further downside risk.
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Traders should watch for ETF-related news, which could strongly impact Bitcoin’s price. Major support sits around $40,400; a drop below here would confirm a bearish breakdown from the pattern.
Looking ahead, Bitcoin is approaching a critical juncture at the apex of this descending triangle, which has tightened its trading range considerably.
A decisive break below the lower trendline, which currently aligns with the $40,400 support, would open the door for an acceleration lower, with potential downside targets around $37,000. Alternatively, a breakback above resistance at $46,000 would invalidate the bearish setup.
In summary, Bitcoin remains vulnerable amidst this descending triangle squeeze, especially after the failed breakout attempt. Traders should monitor ETF developments and $40,400 support closely in the coming days to gauge Bitcoin’s next major move.
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