While the Bitcoin price has managed to hold close to its all-time high levels, there is still bearish pressure lurking in the background for the digital asset. With the surge to new peaks over the weekend, there have been multiple gaps created, and history suggests that Bitcoin will have to drop back down to fill these gaps before it can begin to rally again. These gaps now point to a return to its previous all-time high levels before the rally began last week.
V-Shaped Pattern Shows Bears In Control
Crypto analyst Youriverse explained the Bitcoin situation and why there could be a crash coming soon. First thing he pointed to was the fact that the cryptocurrency had made a V-shaped pattern after hitting its all-time high above $123,000, and this formation is usually bearish. This is because it shows a shift toward sellers being in control as profit-taking becomes more pronounced. This is only the start as more bearish developments are now in play.
Two Fair Value Gaps (FVGs) were created on the 4-Hour chart, and one has already been filled. The first happened with the retest at $119,000 and $120,000, which eventually led to a rejection. Therefore, this leaves one more gap to be filled, and it’s the 4H FVG at its previous highs. This gives credence to the analysis and suggests that the other gaps created could be filled as well.
The analyst puts the second 4H FVG just above $111,000, which coincides with the previous high turned resistance. He believes that this is what makes the level a “magnet,” especially as investors begin to take profit. Strong selling pressure could provide the added momentum needed for the price to fall toward the $111,000 level.
Another major problem right now is that the Bitcoin price has formed a CME gap over the weekend, and with the retracement in price, the CME gap is looking filled at around the $114,000-$116,000 level. There has already been an attempt earlier in the week. But the $114,000 was not touched. If this CME gap is filled, then it makes it even more likely that the second FVG will be filled at $111,000.
Bitcoin Price Still Shows Bullishness
Although the bearishness of the gaps still looms heavy over the Bitcoin price, there is still bullishness left for the cryptocurrency. One example of this is the rising volume alongside the increase in price, suggesting that the volume is being dominated by buyers at this level. Coinglass data shows the daily volume has averaged over $100 billion this week.
The Bitcoin Fear & Greed Index is currently still in Greed, and is yet to enter the Extreme Greed territory, which is usually when a top is marked. Open interest is also sitting close to all-time high levels, which could lead to a price push before a correction.
Featured image from Dall.E, chart from TradingView.com
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