Bitcoin Shoots Through $40K, Warning Signs Already Present
Triple Top at $45K – The Threatening Bearish Pattern
by Bogdan Giulvezan
After two days of serious advances, Bitcoin started a downside correction at $45,000 and is currently trading at $41,000. The last three days have been bearish, for a total loss of almost 8% but the apex cryptocurrency is up almost 7% over the last 7 days.
It’s been a rollercoaster week for Bitcoin, with huge swings up and down: Monday it was trading at $37,500, Tuesday it reached a high of $44,981 and Friday’s lowest price is $40,800 at the time of writing (data from TradingView).
The key level for short-term movement is $42,000 for various reasons: this is psychological support, like all big round numbers, but it is also technical support as it rejected falling prices in mid-February. Also, a long-term bearish trend line is in close vicinity, which gives the level more strength.
Part of the decline can be attributed to jitters created by Russia’s invasion of Ukraine – Bitcoin thrives when investors feel confident to put their money in riskier assets but it is negatively affected by an unstable environment. Currently, we are clearly traversing an unstable environment, to say the least.
However, there may be some good news for crypto, because Bitcoin and USDT (Tether) will become a legal form of payment in the Swiss town of Lugano. The city’s estimated population of 62,000, as well as businesses in the region, will be able to pay for taxes, goods, and services using Bitcoin and Tether alongside the Swiss Franc.
After the polarizing experiment in El Salvador, it’s not clear how this Lugano endeavour will fare, or what effect it will have on the crypto market. What’s certain is that it is yet another step towards mass adoption and real-world use of cryptocurrency.
Technical Outlook – BTC/USD
The main element that must be watched is the picture-perfect triple top created right on the resistance at $45,000. This bearish pattern is obviously stronger than a double top, but it is that much stronger when it is created on an important level.
All this, combined with the military invasion and the overall turmoil, makes a strong case for an extended drop, possibly below $40,000. As mentioned prior, we have intermediary support at $42,000 but the bears are challenging it as we speak, thus a break is very possible.
On the other hand, there was a tremendous amount of bullish pressure (the strong climb that started at $37,500) and part of that pressure is still present. This could lead to a break of $45,000, which would be a major bullish sign and would open the door for an extended climb.
