Bitcoin Faces Potential Drop to $69,000 if Pennant Support Fails, Analyst Warns

A cryptocurrency analyst has raised concerns that Bitcoin could plummet to $69,230 if it fails to maintain support at a crucial Bear Pennant level.

Key Takeaways

Bitcoin's critical support level is around $87,200.
A failure to maintain this support could result in a drop to approximately $69,230.
The current price movement is characterized by a Bear Pennant pattern.
On-chain metrics indicate that current active investors are slightly in profit.

Bitcoin

In a recent update on X, analyst Ali Martinez highlighted the significant support level for Bitcoin that needs to hold firm to prevent a dramatic price decline. This level corresponds to the lower boundary of a Bear Pennant pattern, which represents a bearish trend in technical analysis. If Bitcoin falls below $87,200, the analyst warns it may trigger a drop to around $69,000.

Analyzing Bitcoin's Price Dynamics

In a recent post on X, analyst Ali Martinez discussed the important support level that Bitcoin needs to hold to avoid a significant price drop. This level is identified as the lower boundary of a Bear Pennant.

A Pennant is a technical analysis (TA) pattern similar to a Flag. Both patterns start with an initial sharp movement (known as the “pole”) followed by a phase of consolidation. However, Pennants have a triangular formation rather than a parallel channel seen in Flags. When Bitcoin trades within the consolidation phase of a Pennant, it faces resistance at the upper line and support at the lower line. A breakout through either of these lines can signal a sustained price movement in that direction. Typically, Pennants are viewed as continuation patterns, meaning price movement is likely to proceed in the same direction as the pole. In this particular case, the downward movement indicates that a bearish trend may follow the pattern.

Here is the chart that Martinez shared, illustrating the Bear Pennant that Bitcoin has been trading within on the daily timeframe over the past few months:

Bitcoin Bear Pennant

As shown in the chart above, Bitcoin recently retested the upper boundary of the Pennant’s consolidation area when its price rose above $94,000. However, this retest resulted in rejection, leading to a decline in price.

If the current trend persists, Bitcoin may retest the support level situated around $87,200. Since we are dealing with a Bear Pennant pattern, a failure to hold this line could lead to a bearish breakout.

Typically, breakouts from a Pennant suggest a subsequent price movement mirroring the length of the pole. Based on this assumption, the potential target for Bitcoin's breakout could be around $69,000. Analyst Martinez stated, “Bitcoin ($BTC) must hold above $87,200 to avoid a drop toward $69,230.”

Additionally, Bitcoin is trading near a significant on-chain level known as the Active Realized Price. This metric tracks the average purchase price of active participants in the network. According to data from on-chain analytics firm Glassnode, the Active Realized Price currently stands at $87,700, suggesting active investors are enjoying slight net profits.

Bitcoin Active Realized Price

Current Bitcoin Price

As of the latest updates, Bitcoin is trading at approximately $90,400, having increased by more than 1% over the past week.

Bitcoin Price Chart

The recent price trends of Bitcoin reflect movements observed over the past five days, illustrating its current market situation.