Bitcoin’s 200-Day Support at Risk Amid Nasdaq’s Bearish Double Top Formation
Bitcoin is facing potential bearish trends alongside the Nasdaq after a recent double top formation, threatening its 200-day SMA support at $82,587. The correlation between the two assets suggests that Bitcoin’s long-term recovery hinges on Nasdaq’s performance. Recent declines raise concerns about a deeper downturn for both markets.
The technical outlook for Bitcoin (BTC) and Nasdaq has significantly declined as Nasdaq has triggered a bearish pattern known as a “double top.” This indicates further concerns for BTC’s price stability, especially as it tests crucial support levels around its 200-day simple moving average (SMA). Following a notable drop of over 10% in just 24 hours, BTC has seen its value decline to $82,587, putting pressure on its bullish prospects.
Research from Ecoinometrics highlights the strong correlation between Bitcoin and Nasdaq’s performance, suggesting that Bitcoin’s recovery is intricately linked to Nasdaq’s upward trends. However, with the Nasdaq experiencing a 2.2% decline on Monday, the situation appears dire for crypto enthusiasts. A drop below the 200-day SMA typically signals potential for significant losses in the asset’s value, reinforcing bearish sentiments for BTC.
The characteristics of the double top pattern involve two peaks separated by a trough, which in this case, occurred after a prolonged uptrend. This formation can lead to a target decline of up to 70% of the distance between the peaks and trough, indicating that the Nasdaq might plummet to levels as low as 19,400. With further losses in momentum noted in December, both the Nasdaq and Bitcoin appear vulnerable and are testing their respective support markers.
For Bitcoin, should it close below the 200-day SMA, the next significant support level is projected at $73,757, highlighting critical areas that need to hold to prevent deeper losses. The current market environment underscores the challenges facing both asset classes as they navigate potential downturns together.
The technical analysis indicates a concerning outlook for Bitcoin and Nasdaq following the recent double top pattern. As Nasdaq’s decline impacts Bitcoin’s long-term support, the cryptocurrency is at risk of falling below critical thresholds. With significant losses already observed, investors must remain vigilant as both assets face potential downturns if they fail to reclaim lost momentum.
Original Source: www.coindesk.com
Post Comment