Bitcoin (BTC) has recently formed a double top pattern, indicating a possible trend reversal to the downside before the release of important data that may affect the Federal Reserve interest rate decision.
Bitcoin’s price has experienced significant volatility this month. After reaching nearly $72,000, close to the historical peak reached in March, it fell back to below $62,000.
The price action created a double top pattern – a bearish technical indicator characterized by two consecutive peaks, usually following a significant uptrend. The second peak signals exhaustion of the uptrend, with a break below the bottom between the two peaks confirming the reversal to a bearish trend.
From a technical perspective, it appears that Bitcoin is following a double top formation, with the support level being tested. This formation should be our base scenario unless proven otherwise. It could easily lead to a decline to the $50,000 level, if not $45,000,” said Markus Tilien, founder of 10x Research.
According to him, “we may still witness a steeper correction,” although the US elections and the consumer price index may add bullish sentiment later in the year.
However, the Federal Reserve’s preferred inflation gauge – the personal consumption expenditures (PCE) price index for May – is expected to show the slowest monthly increase in the core measure in over three years. This would strengthen the Fed’s arguments to resume interest rate hikes in September, potentially supporting risk assets, including Bitcoin.