Bitcoin (BTC) Crashes Through Support: Will the Decline Worsen?

Bitcoin (BTC) fell through $106,000 early on Tuesday and it has also crashed through the major ascending trendline. Is it already too late to stop the rot? Are we in the initial stages of a descent into a bear market?

$98,000 next for $BTC price?

Source: TradingView

The short-term time frame for the $BTC price does not display a pleasant picture. Not only have the two strong horizontal supports at $108,000 and $106,000 been turned into resistances, but the price is currently well under the major ascending trendline, with a new 4-hour candle having opened below.

If this current crash is not stopped soon, $98,000 could be the next port of call. Once there, any pretense of a continuing bull market could be pretty much over.

Looking for positives, if the price does not continue its sharp descent, a double bottom could come into play. Also, a trendline coming from the all-time high (faint dotted line), that the price is still above, could provide support and a sorely needed bounce

Is Bitcoin about to lose major trendline support?

Source: TradingView

In the daily time frame it can be seen that the break of the ascending trendline is not something that can be brushed off by the bulls. This is a major trendline that extends back to early August 2024. If the price properly takes hold below this could be a grim development.

There was a previous time right in the middle of the trendline when the $BTC price did break below, and the break was actually confirmed with two whole candles closing below. However, the bulls stepped in and drove the price back above. This needs to happen again.

The 200-day SMA is also being held well below, but once again this has happened previously, and in 2024 quite some period of time was spent below

At the bottom of the chart, the RSI indicator has just reached a key level. A turnaround here, or even beyond the support line, is usually matched by a decent bounce in the price action above.

Bitcoin’s parabolic curve still holding

Source: TradingView

Zooming right out into the weekly time frame, and if one takes out the support trendline, a parabola makes contact perfectly with the bottoms of all the candle wicks so far. If this parabola holds true, the $BTC price still has a bit of leeway to go down and sideways, but not a great deal. It would really help if the bulls can engineer a real bounce in the next week or two to take the price clear of the curve. On the other hand, if the price falls through this curve and confirms below, it’s probably the start of the next bear market.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.