An analyst has detailed a potential downturn for Bitcoin, predicting a drop to the $40,600 level due to a pattern emerging in its 2-month price chart. In a recent post, analyst Ali Martinez discussed a Tom Demark (TD) Sequential signal identified in Bitcoin’s bi-monthly price movement. The TD Sequential is a technical analysis (TA) tool often utilized for detecting probable price reversals in any asset.
This indicator works in two primary stages: setup and countdown. During the setup phase, candles of the same color are counted up to nine, signaling a potential turnaround point once completed. Green candles indicate a sell signal, while red candles suggest a potential bottom.
After the setup, the countdown phase begins, with candles counted up to thirteen. This phase, similar to the setup, points to a probable top or bottom after completion.
Recently, Bitcoin has completed a TD Sequential setup consisting of nine green candles, indicating a potential peak. The cryptocurrency’s 2-month price chart, as shared by the analyst, highlights the completion of this setup.
Following the appearance of this signal, Bitcoin’s price has been declining, currently falling below the $57,000 mark. This pattern suggests that the bearish influence of the TD Sequential signal might be unfolding.
Martinez notes a support level at $51,000, which aligns with the 0.236 Fibonacci Retracement level from Bitcoin’s recent high. Fibonacci Retracement levels are mathematical ratios derived from the Fibonacci series, used to predict potential support and resistance levels in a price chart.
If Bitcoin breaches the $51,000 support, the next significant Fibonacci ratio points to a decline down to $40,600, corresponding to the 0.382 Fibonacci level. This deeper support would imply a drawdown of over 28% from Bitcoin’s current price level.
Over the past day, Bitcoin has continued its downward trend, with its price now dipping to $56,600. The trajectory from here remains uncertain, as market watchers wait to see if these predicted support levels hold or if Bitcoin will experience a further decline.
