Bitcoin Technical Analysis March 31: Bearish Breakdown Triggers – $66K or $60K Target?

Bitcoin is currently being held below the $67,650 resistance level after a recent quick surge up to confirm the break below the neckline of a bearish head and shoulders pattern. Is the $BTC price on the brink of the next move down? Is a shallow move down to $66K next, or can a sell-off take the price down to $60K, with the possibility of an even bigger move down to follow?

A drop is the most likely option

Source: TradingView

The next big move down is staring Bitcoin in the face. Any last ditch attempts to hold the bottom of the bear flag look like they may have been thwarted. Two small surges up to confirm the neckline breakdown from the head and shoulders pattern were possibly the last price action to take place inside the bear flag. Could the drop be next?

That a drop is coming, and possibly a big one, looks a quite likely option. That said, there still could be the possibility of a week or two of sideways price action, as $BTC potentially gets closer to the bear market trendline.

Be that as it may, not only has the $BTC price fallen out of the bearish head and shoulders pattern, it is also posturing to descend out of the bear flag. The measured move from the head and shoulders pattern, if it continues to play out, would be down to $58,600, while the bear flag could take the price all the way down to $38,000.

The remarkably similar tale of two bear flags

Source: TradingView

If the above chart isn’t telling us that another downside leg is coming, then the market could be about to pull off the biggest bear trap ever. So many similarities in the two bear flags are in view here. Firstly, the price action within them either touches or fakes through the bear market trendline at the top of each flag.

Secondly, there is a head and shoulders pattern within them that leads to the breakdown of the flag. Thirdly, the 50-day SMA comes into each flag, acting as support and resistance, before finally forcing the price out of the flag as resistance.

Next is the Stochastic RSI indicators in the daily time frame, that bounce along the bottom for around 3 weeks, and finally, we have the RSI indicator line that drops out of the ascending channel and meanders down to the new low.

In technical analysis there are never guarantees, but there are always probabilities. The above chart is suggesting that there is a very high probability that the $BTC price goes lower.

Bearish doji candle at monthly close

Source: TradingView

The monthly candle close is at the end of the day on Tuesday. As things stand, the doji candle that is currently displaying could even become a gravestone doji candle by the end of today. This is a candle that is normally found at the top of a rally, but in this instance it could serve as a continuation candle. 

The $69,000 level is the very top of the 2021 bull market, so this is a very important level, especially given that it also took an 8-month long bull flag to break above it in 2024. 

It looks as though the $BTC price may be about to close below this level, with a lengthy topping wick above. The price could also close below $67,700, which is another important level.

If we take it that the price does fall down from here, the main support levels in this monthly time frame are at $59,000, $48,000, and $38,000. To which of these could the price fall?

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.