Bitcoin, $30,000 Evaporates?...Worst Collapse Line Appears in Bear Flag

▲ Bitcoin (BTC)

A claim has emerged that Bitcoin (BTC) is forming a textbook bear flag, raising the possibility of a $30,000 plunge. The warning states that if the price fails to overcome key moving average resistance and loses the bottom of the ascending channel, the downside target could open up to the $50,000 to $55,000 range.

Bitcoinist reported on May 5, citing an analysis shared by crypto trader 0xPepesso on X (formerly Twitter), that Bitcoin is forming a bear flag structure on the daily chart. This pattern is a bearish continuation structure that appears when a gentle ascending channel follows a previous sharp drop. If confirmed, an analysis suggests that up to $30,000 could disappear from the current price range.

0xPepesso observed that Bitcoin created the flagpole portion of the pattern by sharply falling from around $98,000 to approximately $60,000 earlier this year. Afterward, instead of a rapid recovery, the price rose along a gentle upward channel to around $80,900. Bitcoinist stated that this trend could be interpreted as a temporary correction within a larger downtrend, rather than a trend reversal.

Key resistance is concentrated around the 100-day and 200-day exponential moving averages, which are gathered near $78,500. These moving averages often act as dynamic resistance during bearish periods. A price action remaining below this range strengthens the bearish interpretation that sellers are still in control, and buyers are not strong enough to reclaim higher price levels.

If Bitcoin fails to break through the cluster of moving averages and breaks below the bottom of the ascending channel, the bear flag structure could be confirmed. In technical analysis, this scenario typically anticipates an additional decline similar in magnitude to the preceding drop, with a downside target set between $50,000 and $55,000. Calculated from the $78,500 resistance level, this leaves room for a decline of approximately $25,000 to $30,000.

However, the bearish scenario also has invalidation criteria. If Bitcoin forms a strong daily close above the 200-day moving average, the bear flag structure would weaken, and upward momentum could be revived. In this case, a short squeeze could occur, pushing the price up to the $85,000 to $88,000 range, according to the projection. Bitcoinist stated that until the price trend decisively changes, the bearish scenario remains a key market watch point amid limited macro support.

*Disclaimer: This article is for investment reference only and is not responsible for investment losses based on it. This content should be interpreted for informational purposes only.*