CoinDesk reports:
Bitcoin (BTC) is facing multiple factors that could lead to a significant price decline, as Uphold’s head of research has identified a potential bearish double top.
It is worth noting that the market has been on a bearish path, with BTC leading the way. The leading cryptocurrency has suffered losses in recent weeks. Despite a historically optimistic performance in July, BTC has already fallen by 3.71% this month, following a discouraging 7% drop in June.
Bitcoin forms a weekly double top pattern
As a result, Bitcoin has been hovering in the lower range of the $60,000 threshold. However, industry leaders believe that the economic downturn may not have ended. Dr. Martin Hiesbeck, head of research at Uphold, recently identified a double top pattern on a weekly time frame.
For the uninitiated, a double top is a bearish setup that indicates a potential continuation of a downtrend. It forms when the price of an asset reaches a high point twice, with a moderate decline between the two peaks. If the price subsequently falls below the level of the intervening low, it confirms the pattern and suggests further downside.
Bitcoin reached a historical high of $73,873 in mid-March, marking the first peak. It then experienced a moderate decline and surged to $72,000 in early June, marking the second peak. However, this pattern remains uncertain as BTC has not dropped to around $60,000.
However, in the recent price decline, Bitcoin retested the area near the neckline, currently trading at $60,362. According to Dr. Hiesbeck, the latest developments make the weekly double top pattern more clear. Therefore, the possibility of a series of sharp declines may be high. He urges investors to manage risks appropriately.
Factors that may lead to further BTC declines
It is worth noting that the market is currently facing multiple factors that could lead to expected declines. One of the factors is the trend of continued selling. Lookonchain recently observed a whale that has been transferring millions of BTC to Binance. The address recently transferred 1,023 BTC worth $62.2 million, bringing his total deposits in the past 24 hours to 1,723 BTC ($106 million).
On June 27, monitoring resources earlier found a similar whale bed involving 1,200 BTC worth $73.4 million. Another whale wallet that has been dormant since 2018 also recently woke up, transferring 1,000 bitcoins to Coinbase.
In addition, The Crypto Basic reported last Thursday that a dormant Bitcoin miner deposited 50 bitcoins into Binance. Another report on June 12 showed that leading Bitcoin miner Marathon Digital recently sold 1,000 bitcoins. It is worth noting that the Bitcoin MPI soared to a one-month high of -0.326, indicating that miners are selling off their holdings.
These increased deposits are reflected in the balance of Bitcoin held on exchanges. CryptoQuant confirmed that Bitcoin’s exchange reserves have increased to 2.841 million tokens, the highest level in almost a month. This trend has increased selling pressure, further exacerbating the selling pressure.
In addition to whale and miner selling, the German government recently added 400 BTC to Coinbase and Kraken. Furthermore, Bitcoin recently decoupled from the bullish US stock market. As a result, cryptocurrency assets have maintained a bearish trend.