In recent days, Bitcoin has experienced significant price fluctuations, with notable upward movements taking it from under $90,000 to above $94,000. As the price surges, many investors are suggesting a potential bull run revival, though skepticism remains among some. Analysts like Xanrox are cautioning against overoptimism, pointing out that the current momentum may signal a bull trap. In a recent analysis, he discusses the optimal timing for selling the cryptocurrency.
Why Bitcoin Price Faces the Risk of Dropping to $74,000
Xanrox’s assessment emphasizes the bearish patterns that have emerged in the Bitcoin price trajectory following its recent rise. While the cryptocurrency community celebrates its rebound above $90,000, Xanrox raises a warning that this may be the moment to adopt a bearish outlook on Bitcoin.
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The analysis presented on TradingView reveals a definitive bear flag formation for Bitcoin. This bearish indicator is apparent in both the 12-hour and 1-day charts. Regardless, both charts suggest a single plausible outcome: an almost textbook bear flag pattern.
Aside from the bear flag, Xanrox identifies a WXY corrective pattern within it. Both trends hint at a potential continuation of the initial downtrend that began after Bitcoin reached $126,000 in October.
Regarding the current rally, Xanrox speculates it could climb as high as $96,000 before momentum fades. This scenario creates an “ideal” opportunity to sell or short as prices begin to decline. The target is a drop of over 25%, potentially bringing the price down to $74,000.
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The $74,000 mark is significant as it represents a swing low from April 2024, indicating that traders holding long positions would likely have their stop losses positioned beneath this level. This creates an incentive for market makers to drive the price down to capture considerable liquidity.
This scenario is anticipated to unfold over the coming weeks, spanning the end of 2025 into January 2026. Should the swing low support level at $74,000 hold, it could serve as a rebound point for Bitcoin prices.
Featured image from Pngtree 42, chart from TradingView.com
