Bitcoin Breakdown Confirmed: Bearish Continuation Expected Despite Short-Term Bounce

Recent price movements suggest that Bitcoin has experienced a significant structural breakdown, marking the end of weeks of price compression and shifting momentum towards a bearish outlook. While a temporary bounce is possible as nearby price imbalances fill, the overall market remains negative. Unless key resistance levels are reclaimed quickly, further downside pressure is anticipated.

Key Takeaways

Bitcoin's price action indicates a structural breakdown after weeks of compression.
A short-term price bounce may occur, but the overall trend remains bearish.
Key liquidity levels below current prices include $64,000 and $62,000.
Short-term sentiment may slightly lean bullish, but a bearish retest is likely as the prevailing downtrend continues.

Bitcoin

Rising Channel Breakdown Indicates Structural Shift

In a recent analysis by crypto analyst Columbus, it was noted that Bitcoin’s market structure has broken down after extended weeks of low volatility. The price had been coiling within an upward channel, forming a series of higher lows that approached a resistance level. Rather than breaking higher, Bitcoin was rejected at this trend resistance, leading to a notable downturn.

The current market movement suggests a continuation downward. What previously appeared to be bullish consolidation has now shifted to a potential distribution phase. Key liquidity levels are positioned below current prices, with the $64,000 area acting as the first major attraction due to past market reactions and existing buy orders. Below that, the $62,000 zone could see increased activity, particularly if selling pressure intensifies.

Bitcoin
Source: Chart from Columbus on X

Previous expectations were clear: acceptance above resistance would confirm continuation upwards, while failure would lead to a downward shift. As it stands, the market has aligned with the latter scenario. Unless Bitcoin quickly recovers and maintains above the $68,000 mark, any potential rise will likely serve as a temporary relief rally into a supply zone, with a short-term negative sentiment as the focus remains on reactions around the $64,000 level.

Bearish Control Indicated by Bitcoin's 4H Structure

In examining Bitcoin's 4-hour time frame, analyst Minga has pointed out that weekend trading, particularly Saturdays, often experiences lower activity levels. Nonetheless, the current market bias appears neutral to slightly bullish, with price reacting from the low point of the week. It is crucial to stay above the blue order block (OB) noted below, as this keeps the possibility open for a retest of the $67,300 level.

Despite the potential for a short-term bounce, the 4-hour market structure has already flipped to a bearish state. Recent downturns have left behind a discernible imbalance, which prices tend to revisit and fill, either during the weekend or into the following week.

A successful reclaim of the $67,300 level could initiate a stronger corrective rally towards the $68,800 region, which is now recognized as a critical zone for bearish continuation. Hence, any rise towards this price point may encounter resistance, potentially setting the stage for another decline that aligns with the overarching trend.

There also exists a chance that the price could dip into the lower boundary of the blue OB before any substantial upward movement happens. Regardless of the specific trajectory, it is expected that the imbalance created by prior movements will be addressed. For this reason, short-term sentiment is slightly bullish on lower timeframes, albeit with a likely bearish retest expected before further continuation in line with the existing downtrend.

Bitcoin
BTC trading at $66,389 on the 1D chart | Source: BTCUSDT on Tradingview.com