Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, appears bearish and may experience a notable price drop in the coming hours or days. On October 18, 2024, BTC hinted at a possible price correction as it formed a bearish candlestick pattern at a strong resistance level.
Bitcoin (BTC) technical analysis and upcoming levels
According to expert technical analysis, BTC is currently facing strong resistance at the upper limit of a descending channel pattern. Since March 2024, BTC has reached this level more than six times, each time experiencing notable selling pressure and a price drop of more than 20%.
However, the formation of a bearish engulfed candlestick pattern on the daily time frame suggests a similar price decline in the coming days.
In addition to this bearish outlook on the daily time frame, a closer look at the BTC chart over the four-hour time frame shows that the world’s largest cryptocurrency is currently finding support at the $66,700 level. Additionally, BTC consolidated between $66,700 and $68,000 over the past two trading days.
Based on the recent price momentum, if BTC breaks the lower bound of the consolidation zone and closes a daily candle below the USD 66,500 level, there is a strong possibility that the asset could fall by more than 6% to reach the USD 62,500 level.
Bearish sentiment confirmed by on-chain metrics
BTC’s negative outlook is further supported by on-chain metrics. According to the on-chain analytics company Mint glassBTC’s Long/Short ratio currently stands at 0.968, indicating bearish sentiment among traders. Furthermore, future open interest has fallen 3.43% in the last 24 hours and 1.85% in the last 24 hours.
This drop in open interest indicates that traders’ long positions are being liquidated or traders are exiting their positions, likely out of fear of a price crash.
Combining these on-chain metrics with the technical analysis, it appears that bears are currently dominating the asset and have the potential to cause a massive price drop.
Current price momentum
At the time of writing, BTC is trading around $66,920 and has experienced a price drop of over 1.8% in the past 24 hours. During the same period, trading volume fell by 21%, indicating lower trader participation due to current market sentiment.
