Bitcoin (BTC) has recently formed a double top pattern, indicating a potential bearish trend reversal before the release of important data that could impact the Federal Reserve’s interest rate decisions.
The price of Bitcoin has experienced significant volatility this month. After reaching nearly $72,000 (close to the all-time high of around $62,000), it dropped below $60,000.
The price movement has created a double top pattern, a bearish technical indicator characterized by two consecutive peaks, usually appearing after a significant uptrend. The second peak marks the end of the upward trend, and a break below the bottom between the two peaks confirms the reversal of the bearish trend.
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Bitcoin continues to decline: What should we pay attention to this week?
“Technically, Bitcoin appears to be following the double top pattern, with support levels being tested. Unless confirmed, this pattern should be our baseline scenario. It could easily drop to $50,000 and potentially even $45,000,” said Marcus Thielen, founder of 10x Research.
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According to him, “However, we may see steeper corrections,” despite the potential bullish sentiment later this year due to the US election and consumer price index.
Nevertheless, the Federal Reserve’s preferred inflation indicator, the May Personal Consumption Expenditures (PCE) Price Index, is expected to show the slowest monthly increase in core indicators in over three years. This will reinforce the Fed’s reasons to resume rate cuts in September, potentially supporting risk assets including Bitcoin.
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