Bitcoin [BTC]: Why a ‘theoretical target’ of $21.5K is worth looking at

ambcrypto.com:

Bitcoin’s price, at the time of writing, flashed an interesting yet extremely bearish setup, one that has already been breached. Therefore, investors need to tread lightly around BTC and altcoins since a continuation of this trend could lead massive sell-offs.

BTC seemed to be traversing a bearish continuation pattern known as a bear flag. The 52% crash from its all-time high at $69,000 to $32,837 was the price action that created the flag pole. Following this downswing, BTC entered a stagnation period where it formed a series of higher highs and higher lows. Connecting these swing points using trendlines forms an ascending parallel channel known as a flag.

This technical formation highlights the likelihood of a 46% crash if the flag’s lower trendline at $40,0032 is breached. The pessimistic target is determined by adding the flagpole’s height to the breakout point, placing Bitcoin’s price at $21,584.

Bitcoin’s price not only triggered a bearish breakout on 23 April, but it was also rejected at a subsequent recovery rally. This development is a sign that the bear flag’s bearish outlook is already in play.

However, there is one support level at $36,271, one that could put a dent in the bearish scenario. A bounce off this barrier that pushes Bitcoin’s price back into the bear flag could invalidate the setup and also trap early sellers. 

Only a weekly close below $36,271 will confirm a bearish outlook and trigger a crash to the $30,000-psychological level. This barrier could also serve as a stale support level after the market makers collect the liquidity resting below the equal lows formed around $29,000.

However, if the retail traders capitulate, the sell-off could extend to the theoretical target of $21,584.

Source: BTC/USDT,