A cryptocurrency trading expert is cautioning traders about a potential risk on the horizon: Bitcoin (BTC) might be gearing up for a significant downturn following a misleading rally. Despite recent gains, Bitcoin has failed to reclaim its previous all-time high, and after a strong October close, November opened with a steep drop that saw the price dip below the $70,000 resistance level.
Analyst Alan Santana highlighted a potential warning sign: Bitcoin recently posted five consecutive days of losses, a rare pattern that has not been seen since May 2023. Santana pointed out on TradingView (November 3) that this chart behavior could signal increased downside risk. The recent trading pattern, characterized by a “rounded top” or “inverted cup,” often suggests a possible bearish reversal.
Key Bitcoin Price Levels to Monitor
Bitcoin has approached a critical support level around $69,000, which has so far struggled to withstand selling pressure. Santana suggests that breaking below this level may validate a bearish structure, possibly pushing Bitcoin lower and bringing $40,000 into play as the next potential target.
While Santana noted there’s still room for Bitcoin to recover, he urged traders to be extremely cautious. The current chart shows a notable weakness after forming a “double top” near $73,800 without achieving a new high, casting doubt on sustained bullish momentum. This weakness, coupled with a decline across the broader altcoin market, has led Santana to believe Bitcoin could be on the verge of its “biggest crash in recent years.”
"We’ve seen two similar five-day declines this year. The first was in August, marking the start of a large downturn, and another in June amid a bearish trend. A five-day consecutive drop hasn’t happened directly following a peak before, which could mean Bitcoin is preparing for a sudden reversal—and may avoid further declines. Alternatively, this could be a sign of a significant crash, with the latter scenario being the more probable.”
Upcoming Weekly Close Critical for BTC Outlook
Santana advises investors to keep a close eye on Bitcoin’s weekly close, as a drop below the neckline support at $68,000 could trigger a more severe decline. Analyst Ali Martinez echoed this bearish sentiment, observing a rejection pattern on Bitcoin’s weekly chart, signaling weakening upward momentum. In a November 3 post on X, Martinez noted that Bitcoin's weekly candle formed a long upper shadow, a sign that the recent rally may be faltering and could invalidate further bullish momentum.
Market Optimism and the Potential for Bullish Catalysts
Despite the current uncertainty, some optimism remains in the crypto market, with hopes that Bitcoin can recover following its strong October close above $70,000. This fueled expectations that BTC might reach the $100,000 milestone. However, the failure to maintain this level indicates that investors may have to wait longer for new all-time highs.
As traders look to the coming week, one key catalyst could be the outcome of the U.S. presidential election, with market sentiment suggesting a Trump victory could be bullish for Bitcoin due to his support for the crypto sector.
Bitcoin Price Analysis
Currently trading at $68,579, Bitcoin has seen a modest 0.56% recovery over the past 24 hours, with slight weekly gains around 0.2%. Although Bitcoin is facing a near-term correction, other technical indicators suggest it may still have room for upward momentum in both the short and long term.
Bitcoin is presently trading above its 50- and 200-day moving averages, and the Relative Strength Index (RSI) reflects stability, indicating the potential for resilience amid the recent market downturn.
The market remains closely tuned to upcoming economic and political events that could influence Bitcoin’s direction, with the potential for significant shifts in sentiment and momentum in the weeks ahead.
