Analysts Warn of Possible Bitcoin Decline to $86K Amid Bearish Wedge Formation

Crypto analysts are cautioning that Bitcoin may face a decline to the $86,000 mark due to the emergence of a bearish rising wedge pattern. This chart analysis indicates that if Bitcoin fails to break certain resistance points, a drop back to the support zone could occur.

Key Takeaways

Bitcoin has recently risen but is forming a bearish rising wedge pattern near the $94,000 level.
A critical support line is identified at $92,000; a break here might trigger a fall to the $86,000-$91,000 area.
The market is seeing increased whale accumulation between $90,000-$92,000, but strong sell walls are present at $95,000.
Current trading volatility suggests potential movements toward the $100,000 mark, despite concerns about further downside risks.

Analysts Warn Bitcoin Could Drop to $86K as Bearish Wedge Forms

Bearish Wedge Indicates Critical Support at $92K

Crypto analyst Don Wedge has alerted traders that, despite Bitcoin's recent rising trend, a bearish rising wedge pattern is developing near the $94,000 level. If this pattern continues to exert pressure, it could push Bitcoin down to the $86,000 support zone.

According to a rising wedge chart shared by Don, with insights from the market intelligence platform Gigabrain, there's ongoing resistance near the white line at approximately $98,000. This line serves as a significant invalidation point for bearish traders.

Bitcoin Bearish Wedge - Bitcoin Price Chart Analysis

“The white resistance line needs to be broken to invalidate the scenario. If it is overcome, the two green targets at $103,000 and $112,000 could be reached, depending on whether bulls can protect the $94,000 level,” Don mentioned.

Increased Bearish Sentiment in the Market

Macro trader Crypto Batsman also expressed cautious views. In a recent post on X, he emphasized that while Bitcoin has been performing well in the short term, it may not be acting favorably on a larger time scale.

“The price is currently interacting with the 50-week EMA, which previously provided strong support during the bull run. However, as it has now been breached, this level is turning into resistance,” he pointed out. “While daily indicators seem bullish, zooming out presents a different perspective.”

Whale Accumulation and Sell Walls in Focus

Recent data from Coinglass shows that large investors, or 'whales', accumulated Bitcoin when prices were between $90,000-$92,000. This accumulation helped drive the price upward toward $95,000, where significant sell walls have been established. The market is now stabilizing around $93,000 without any definitive reversal signals.

The short-term holder chart indicates a recent spike in profitability just as prices have begun to rise, reversing the previous trend of losses over the weeks.

Bitcoin Bearish Wedge - Short-term Holder Profit Loss to Exchanges Chart

However, although this uptick in short-term momentum is a positive sign, such late profit spikes typically suggest the end of a local trend rather than the start of a new upward leg.

As recent buyers face renewed selling pressure, insights from Glassnode reveal that the Short-Term Holder cost basis currently rests at $98,300. This figure represents the average entry price for these investors and plays a crucial role in assessing market confidence.

Sustained trading above this level would suggest that new demand is absorbing the selling pressure, helping recent buyers remain profitable. Historically, reclaiming and holding above the Short-Term Holder cost basis has been associated with transitions from corrective phases to more robust uptrends.

Increased Volatility Expectations in Short Gamma Zone

As Bitcoin trades approximately between $95,000-$96,000 at the time of this analysis, it has entered a short gamma zone approximating $94,000 to $104,000. This trading range, if maintained with enough volume, might lead to hedging flows, which could result in swift price movements toward notable strikes like the $100,000 level.

The Glassnode Implied Volatility Index highlights that while a downside risk to $86,000 looms, the market still anticipates a potential retest of the $100,000 area while displaying caution about maintaining levels above this threshold for extended periods.

Bitcoin Bearish Wedge - Implied Volatility Index Chart

Traders are currently targeting upside in the near term, yet they remain focused on longer-term monetization strategies.