With bearish divergence and a double top pattern in evidence, Bitcoin is set for a possible correction to the $71,300 mark. The technicals suggest that one should exercise some short-term caution as the market decides its next move, according to analysis presented on The Moon Show.
Understanding the Bearish Divergence in Bitcoin
The host of the show pointed to the daily chart where this kind of divergence is visible; it is an indicator that typically precedes lower prices. In this instance, while the asset’s price is making higher highs, momentum measures such as the RSI are moving in the opposite direction with lower highs, which indicates a lack of buying pressure. That has prompted the expert to flag $71,300 as a level to watch in the days ahead.
There is also the matter of the double top that has formed on the chart. It is a textbook example of a bearish reversal and lends further credence to the idea that the current upward run is losing momentum and a pullback is likely.
Expert’s Worst-Case Scenario and Trading Tips
On The Moon Show, the expert presented a bearish view for a worst-case scenario: Bitcoin could drop to $71,300. Yet he is not losing his long-term bullishness on the asset and has a sizeable $3 million position in it to show for it. He adds that there is potential for volatility as the coin could climb back to $84,000 before a more serious correction.
When it comes to where one should be trading, he points to Bybit over Binance, whose waning popularity he has observed. His advice to the audience is to resist the urge to panic sell during a downturn; if Bitcoin were to drop to the $71,000 mark, that is where buying opportunities can be found.
Potential for a Bullish Reversal
The expert is not swayed by the current bearish signals. He notes that if Bitcoin forms an inverse head and shoulders pattern, a bullish reversal may be imminent; his analysis suggests the price could reach $125,000 on the strength of such a technical formation. It is a lesson in caution for newer traders: while the short term calls for care given the bearish divergence, one can be optimistic if the right patterns develop.
All in all, The Moon Show’s view is one of guarded optimism. There are certainly risks of a correction to contend with, but the host has laid out the scenarios for both downside and upside in clear terms.
This article reflects the channel author’s opinion and is not investment advice.
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Source — The Moon Show: https://www.youtube.com/watch?v=hge07Y3Z9KM
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