Bitcoin Double Top Rejection Could See Downtrend Resume

Bitcoin hit a weekend high of $21,000 on Saturday, its highest price since September 13. Prices began to move mid-week, culminating in a 5% increase since the same time last week.

However, this move looks set to break down as a clear double formation has been printed on the charts.

The pattern has been identified by leading analysts this morning, with Lark Davis noting that volume has also fallen throughout the move.

#bitcoin possible double top after second rejection at $21,000! Volume has dropped throughout the move.

Closing below the orange line will give us a breakout target of $19,000! pic.twitter.com/ndN3gIhGqI

— Lark Davis (@TheCryptoLark) 30 October 2022

Bitcoin Bears back in play

Davis noted that support was in the $19K region, where the asset has been consolidating for most of October. There simply isn’t enough momentum and demand to drive prices higher at the moment, and the macroeconomic outlook remains bleak.

Cryptoanalyst and trader “il Capo” told his 570,000 followers that the downside could be even worse, with a potential bottom of $14,000 in November.

This scenario would mirror the final flush-out of the 2018 bear market that sent Bitcoin prices crashing over 50% to hit a low of $3,200 in November.

Clear double top for $BTC at 21k. pic.twitter.com/bAImSRFoMR

— il Capo Of Crypto (@CryptoCapo_) 30 October 2022

Fellow trader and analyst “Rekt Capital” zoomed out to look at the bigger picture. He said that a bearish monthly close would take place if Bitcoin closed below the $20K green support zone. This would be the second consecutive monthly industry under $20K, he added.

“And since $BTC lost the green-red range in September, such a close could set BTC up for a bearish continuation,”

A bearish one #BTC Monthly close would occur if BTC closed below green support at ~$20K

It would be a second consecutive monthly close under ~$20K

And set as $BTC lost the green-red area in September, such a close could set BTC up for bearish continuation#Crypto #Bitcoin pic.twitter.com/iTbpqPlFaY

— Rekt Capital (@rektcapital) 30 October 2022

At the time of writing, Bitcoin was trading down 1% on the day at $20,553 during the Asian trading session on Monday morning. There is some support at $20,200, but the main level is around $19,250.

Elsewhere in crypto markets

Total market capitalization fell a percentage point overnight to $1.05 trillion, with daily volumes also falling back to around $70 billion, according to CoinGecko.

Ethereum, which hit a peak of nearly $1,650 over the weekend, has fallen 1.6% to $1,584. The asset has gained as much as 16% in the past week, but is likely to move in the shadow of its big brother.

Most of the altcoins were either neutral or in the red, with slightly bigger losses for Ripple’s XRP, Cardano (ADA), Shiba Inu (SHIB) and Uniswap (UNI).

By all accounts, things are shaping up to be a bearish November, but on the upside, it could signal the bottom of this market cycle.