"W-shaped bottom is a trap"...If Bitcoin can't get past 'here,' it will fall to $68,000

▲ Bitcoin (BTC)/AI generated image

Bitcoin (BTC) has shown the possibility of entering a correction phase as selling pressure increases below a key technical zone. An analysis suggests that with key support lines threatened and reversal patterns forming, the market has entered an inflection point that will determine its future direction.

NewsBTC reported on May 23 (local time), citing cryptocurrency analyst Kamile Uray, that Bitcoin's buying momentum is weakening. Uray analyzed that if Bitcoin falls below the key low of $74,929, the final shoulder of the developing head-and-shoulders structure could be completed. This structure is unfolding below the previous low near $76,044.

Uray believes that if Bitcoin fails to establish a clear closing price above $78,213 on the 4-hour chart, the bearish trend is likely to continue. He explained that a sustained break below $74,929 could open up further downside to the $71,000 to $68,000 range. This range was presented as a major Fibonacci support level.

Analysis also suggested that if strong buying pressure enters the lower range, an attempt at a recovery rally is possible. Uray pointed out that in the process of an upward reversal, Bitcoin must first overcome resistance near $98,000, and then break through a larger resistance zone between $107,000 and $109,000.

However, Uray emphasized that if Bitcoin fails to maintain strength above its recent high of $126,199, the risk of a major correction remains. He analyzed that if a deeper decline unfolds, $60,000 could act as a key support level that will determine the long-term market direction.

Another cryptocurrency analyst, Merry__PT, diagnosed that Bitcoin's recent price movement is undergoing structural changes. Merry observed that the W-shaped bottom structure, which was considered a bullish reversal signal, is now transforming into a head-and-shoulders top structure, interpreted as a bearish reversal signal.

Merry presented the blue horizontal baseline neckline as the most important technical element going forward. This support zone serves as the foundation for the current structure and the potential for a larger trend reversal. The explanation is that if this neckline is clearly defined and widely recognized by market participants, the validity of the head-and-shoulders pattern could increase.

If Bitcoin clearly breaks below this neckline, the pattern, which was merely a technical observation, could turn into a signal triggering a sustained correction. The monthly close was also mentioned as a key criterion for judging future investor sentiment and market direction.

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