Now, analysts like Ali Martinez are pointing to a bearish pattern that could see the major cryptocurrency fall to $52,000. The condition under which this is possible is if the descending parallel channel that Bitcoin has been trading in since early spring becomes the dominant pattern.
A descending parallel channel is a chart pattern characterized by two descending trendlines that frame the price action of an asset. This formation usually indicates bearish sentiment as the price moves within a limited range.
In this scenario, traders make sure that the price stays below the upper trendline, while frequently testing the lower trendline. When the price breaks below the lower trend line, it often signals further declines.
If Bitcoin does not hold above this level as well, there could be a wave of selling that leads to further declines. That is why market participants are watching the situation closely, as they think about ways to eliminate risk.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
