Credit: Original article published by Bitcoinist.

Bitcoin’s efforts to recover from its two-week price dip fell short as it closed towards a psychological pullback junction.

The benchmark cryptocurrency pared its earlier gains above $34,000, falling by as much as 6.83 percent to trade at an intraday low of $31,990. It has added over 18 percent to its valuation following a dip below $30,500 in the previous sessions. But a higher selling pressure in the $34,000-36,000 area limited the upsides, leaving the price in a choppy range.

Descending Triangle

So it appears, Bitcoin started forming a series of lower highs after it established a record peak near $42,000 on January 8. Meanwhile, a stronger buying sentiment in the $30,000-31,000 range served as support. The overall trading range appeared like Descending Triangle, a bearish reversal/continuation pattern regarded by professional traders.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin slips after testing the Descending Triangle resistance. Source: BTCUSD on TradingView.com

At Friday midnight, Bitcoin retested the Triangle’s upper trendline for a breakout but failed. A pullback ensued, and the price fell back—apprehensively—to retest the channel’s lower trendline. The chances of it happening increased further as CryptoQuant CEO Ki-Young Ju revealed an on-chain bearish signal.

The blockchain analyst noted a spike in the so-called Exchange Whale Ratio, representing the top 10 bitcoin transactions divided by total inflows. If the ratio stays below 85 percent, it signals a bull market. Conversely, a reading above 85 percent warns about a bearish assault.

On Friday, the Exchange Whale Ratio reached its eight-month high, leading Mr. Ju to say that “BTC might have a large red candle if the price drops.”

“It’s supposed to be below 85% if this bull-run is legit. Otherwise, it’s likely to be a bull trap,” he added.

The $20K Bitcoin Price Target

Bitcoin’s Descending Triangle formation hinted at a deeper price retracement if the price breaks below its support level.

Technically, an asset should fall by the maximum distance between the Triangle’s upper and lower trendlines following a bearish breakout. In Bitcoin’s case, the gap spans $12,000, which puts the cryptocurrency en route to below $20,000 in the medium-term.

Nevertheless, adjusting the Triangle pattern’s lower trendline also makes it look like a Symmetrical Triangle, a bullish indicator in an uptrend.

Bitcoin Symmetrical Triangle setup. Source: BTCUSD on TradingView.com

A breakout above the upper trendline, coupled with high volumes, expects to take the bitcoin price above $50,000 in the medium-term.

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CryptosOnline.com does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

#Bitcoin #Cryptocurrency #Crypto

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