Despite Bitcoin’s ability to maintain proximity to its record high levels, bearish forces continue to loom over the cryptocurrency. The recent surge to unprecedented heights over the weekend has resulted in multiple gaps, and historical trends imply that Bitcoin may need to descend to address these gaps before embarking on another upward trajectory. These gaps suggest a potential return to its prior high levels seen before last week’s rally.
V-Shaped Pattern Indicates Bearish Dominance
Crypto analyst Youriverse has assessed the current Bitcoin scenario, highlighting potential forthcoming declines. He noted that the cryptocurrency formed a V-shaped pattern after reaching its peak above $123,000, a typically bearish signal. This pattern reflects a shift towards seller dominance as profit-taking becomes more evident, marking the beginning of more bearish trends.
Two Fair Value Gaps (FVGs) have emerged on the 4-Hour chart, with one already addressed. The initial gap appeared during a retest at $119,000 and $120,000, eventually leading to a pullback. This leaves another gap to be addressed at the previous highs, reinforcing the analysis that other gaps may also be filled.
The analyst identifies the second 4H FVG just above $111,000, aligning with the previous high, now acting as resistance. He suggests this level acts as a “magnet,” especially as investors seek to realize profits. Intense selling pressure could drive the price towards the $111,000 mark.
Another issue is the formation of a CME gap over the weekend, with the price retracement nearly filling it around the $114,000-$116,000 range. An earlier attempt this week failed to reach $114,000. Should this CME gap close, it increases the likelihood of filling the second FVG at $111,000.
Bitcoin Price Remains Optimistic
While the gap-induced bearish sentiment persists, there is still a degree of optimism for Bitcoin. This is evident in the rising trading volume accompanying the price increase, indicating buyer dominance at this level. According to Coinglass, the daily trading volume has surpassed $100 billion on average this week.
The Bitcoin Fear & Greed Index remains in the Greed zone, not yet reaching Extreme Greed, which typically signals a market peak. Open interest is nearing all-time high levels, potentially leading to a price surge ahead of a correction.
