Important points:
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If a bear flag appears on the daily chart, the Bitcoin price is expected to fall to $88,000.
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Traders say BTC price could fall to $97.5 million if the key support level is broken.
Bitcoin (BTC) price has formed a typical bearish pattern on the daily time frame, raising concerns that a breakout could lead to a drop below $90,000.
Bull Flag Breakout Points to $88,000 Target
Bitcoin price action is forming a textbook bearish flag pattern on the daily chart, a bearish continuation setup that forms when the price drops sharply and then consolidates upwards in a parallel channel.
In the case of Bitcoin, flags started forming after BTC bottomed at around $103,530 on October 11th. The consolidation continued last week and the price is continuously retesting the flag support line, which is currently at $107,500.
Related: Bitcoin could “final flush” to $104,000 before bull market returns
If the daily candlestick falls below this level, the bearish flag will be activated, opening the door for a bearish continuation towards the pattern’s measurement target of $88,100. Such a move would result in a total loss of 19%.
Momentum indicators such as the Relative Strength Index (RSI) are also providing support, with the RSI currently at 42, suggesting market conditions remain favorable to the downside.
As reported by Cointelegraph, if a similar bearish pattern is confirmed on the 4-hour chart, it is expected to fall towards $98,000, which is also a level to watch for a possible reversal in the short term.
Observe the Bitcoin price level next: Analyst
The BTC/USD pair has fallen 13.6% from its all-time high of over $126,000, according to data from Cointelegraph Markets Pro and TradingView.
The drawdown took Bitcoin below its short-term holder cost threshold of around $113,100, but according to on-chain data provider Glassnode, this structure has historically preceded “the onset of a mid-term bear phase where the weak begin to capitulate.”
Glassnode said in its latest Week on Chain report that Bitcoin’s supply quantile cost-based model reveals that bulls need to keep BTC above the 0.85 quantile at $108,600 to avoid further declines, adding:
“Historically, failure to sustain this threshold has signaled structural weakness in the market, often resulting in a deeper correction towards the 0.75 quantile, currently located near $97.5,000.”
For popular crypto analyst Daan CryptoTrades, the $111,000 level is “significant in the short term.”
“If the price breaks through and sustains that point, we can start looking for higher levels,” the trader said in a post on X on Thursday, adding:
“From yesterday’s stock price, it’s good that the $107,000 level was able to hold in this downturn, but it’s an important support to hold going forward.”
As reported by Cointelegraph, Bitcoin is at a critical juncture, with a daily close below the $107,000 support level, paving the way for a psychological drop below $100,000.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.