Bitcoin (BTC), the world’s largest cryptocurrency by market cap appears bearish and is poised for a notable price decline in the coming days. The bearish outlook is driven by overall market sentiment and the recent breakdown of a crucial support level at $66,500.
According to CoinPedia’s technical analysis, BTC appears bearish as it failed to sustain above the $66,500 level. In addition to this, it has further formed a bearish engulfing candlestick pattern on the daily time frame at the upper boundary of the descending channel pattern.
However, this upper boundary is a level where the asset has experienced notable selling pressure earlier. Since March 2024, BTC has reached this level more than six times, with each instance followed by a price decline of over 20%. This time, the chart pattern appears similar to the previous ones
Based on the price action and historical momentum, if BTC closes its daily candle below the $66,400 level, there is a strong possibility the asset could decline by 10% to reach $60,000 in the coming days.
Bitcoin’s negative outlook is further supported by on-chain metrics. According to the on-chain analytics firm Coinglass, BTC’s Long/Short ratio currently stands at 0.93, indicating a strong bearish sentiment among traders.
Additionally, its open interest has declined by 4,2% over the past 24 hours, indicating liquidation of long positions following a recent breakdown of support level.
As of now, the major liquidation levels are at 65,710 on the lower side and $68,150 on the upper side, with traders over-leveraged at these levels, according to the Coinglass data.
If sentiment remains unchanged and the price declines to the $65,710 level, nearly $558.2 million worth of long positions will be liquidated. Conversely, if the sentiment shifts and the price soars to the $68,150 level, approximately $1.31 billion worth of short positions will be liquidated.
At press time, BTC is trading near $66,390 and has experienced a modest price decline of 1.1% in the past 24 hours. During the same period, its trading volume declined by 26%, indicating lower participation from traders and investors compared to previous to days.
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