Bitcoin Drops To $25k - What's Next?

My thoughts and analysis

Welcome to the Rekt Capital newsletter, a place for people who want to better navigate the crypto markets with the help of cutting-edge crypto research and unbiased market analysis.

Bitcoin Has Broken Down

For weeks, Bitcoin has been hovering around the $26000 level (black).

But with the latest Weekly Close below ~$26000 in the books, it looks like that was enough to prompt the breakdown process from the emerging Double Top formation that we've been covering since early August:

Slowly, the Double Top appears to be playing out:

And the key to kickstarting this process was a Weekly Close below ~$26000 where then BTC flipped also this level into new resistance.

This entire move is happening on below average volume, however.

There hasn't been a breakout on seller volume either and so the sell-side pressure that price is seeing right now isn't being prompted by much.

It's likely there'll be acceleration in the trend once more volume comes in; it appears that little seller volume can prompt stronger moves than would otherwise be the case.

Even then however, it's important to realise that that downside wouldn't occur all in one time, most likely.

The bearish fractal from 2021 suggests this, for example:

The bearish fractal suggests that BTC could drop into the ~$24000 region and still experience sizeable relief, even if just to revisit ~$26000 and re-confirm it as a new resistance before experiencing trend continuation.

The Bigger Picture

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