Bitcoin (BTC) is currently facing a challenging time in the market, with the ongoing tariff war and bearish price action leading to a potential massive price crash. Despite appearing to consolidate within a tight range, a closer look reveals a bearish head and shoulders pattern forming on the four-hour time frame.
The current price momentum for BTC is not reflecting any positive news, as the market seems to be reacting poorly to recent developments. Treasury Secretary Scott Bessent’s statement initially sparked a rebound for BTC and other major assets, but the momentum quickly faded, resulting in a price decline of over 1.10% in the past 24 hours. The decrease in trading volume by 50% further indicates lower participation from traders and investors due to increased market volatility.
Technical analysis suggests that BTC is approaching the neckline of the bearish head and shoulders pattern, indicating a potential further decline in price. If the $81,500 level is breached, there is a strong possibility of a 4% decline to reach the $78,200 level in the near future. Additionally, BTC is currently trading below the 200 Exponential Moving Average (EMA) on both the daily and four-hour time frames, signaling a strong downtrend and weak momentum.
Despite the bearish outlook, there are indications of accumulation by investors and long-term holders. On-chain analytics firm Coinglass reported a $175 million outflow of BTC from exchanges in the past 24 hours, suggesting potential accumulation during a bearish market sentiment. While this outflow could create buying pressure and potentially trigger an upside rally, it is more commonly associated with a bull run.
Overall, Bitcoin’s price trajectory remains uncertain as it navigates through the current market conditions. Traders are advised to closely monitor key levels and patterns to make informed decisions in this volatile environment.