200-Day Line Blocked Again! Fear of Bitcoin Bear Market Resumption Spreads

▲ Bitcoin plummet/ChatGPT generated image ©

As Bitcoin continues its precarious tightrope walk above key support levels, warnings are emerging in the market that another major downturn could be beginning. Investor sentiment is freezing again as analysis suggests that the 'Head and Shoulders' pattern, a representative bearish reversal pattern in technical analysis, is nearing completion.

According to crypto media outlet Finbold on May 27 (local time), TradingShot, through its TradingView analysis, diagnosed that Bitcoin (BTC) is on the verge of entering a new bearish phase. The outlet noted that downward pressure intensified after Bitcoin failed to break through the 200-day moving average (MA), a key long-term resistance line, and subsequently slipped below the 50-day moving average.

According to the analysis, a classic Head and Shoulders pattern is currently forming on the chart. The left shoulder and head sections are already complete, and the right shoulder is also nearing its completion. In technical analysis, the Head and Shoulders pattern is classified as a representative bearish reversal signal, and it is evaluated as a pattern where the possibility of further sharp declines increases if key support levels are broken.

Bitcoin is currently trading around $75,800, fluctuating near the pattern's neckline support. The outlet predicted that if this support line clearly breaks down, there is a possibility of a decline to approximately $65,600. This range is where the 2.0 Fibonacci extension level overlaps with the top of the first major support zone, a price point where the possibility of buying interest is being discussed.

However, analysis also suggests that if selling pressure intensifies further, the support range could extend to the early $60,000s. The outlet pointed out that the fact that Bitcoin remains below the declining 200-day moving average, coupled with failed rebound attempts after the head formation, indicates a weakening market structure. Experts warn that if this pattern is confirmed, another downward wave could begin after several months of volatile market conditions.

Actual market trends are also sluggish. Bitcoin is trading at $75,711 at the time of writing, down approximately 2% over 24 hours. A bearish trend is also continuing on a weekly basis. The 50-day Simple Moving Average (SMA) is at $77,097, and the 200-day SMA is at $80,301, with the current price below both. The Relative Strength Index (RSI) is at 42.91, remaining in neutral territory but moving below the key baseline of 50, suggesting weakening buying momentum.

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