A double top pattern is formed when an asset’s price reaches a high point, drops, and then rises again to a similar level, creating two distinct peaks separated by a trough. This pattern is considered a reversal signal, suggesting that the upward trend may be losing momentum, and a potential downturn could be on the horizon.
Jelle’s analysis was made when the bitcoin price was hovering around $67,900. Based on the double top formation, he predicted that the price could plummet to $12,000, a staggering 82% decline from the current levels.
Extreme Prediction or Plausible Scenario?
While a drop to $12,000 may seem like an extreme prediction, several factors could contribute to such a drastic downturn. First, the crypto market has been known for its volatility, and substantial price swings are not uncommon. Additionally, the recent surge in bitcoin’s price might have been fueled by speculation and hype, which could potentially lead to a sharp correction.
However, it’s important to note that Jelle’s prediction contrasts with the prevailing sentiment among many market participants. In recent weeks, there has been a significant influx of capital into bitcoin, with investors anticipating a potential bull run. Moreover, the recent halving event, which reduced the supply of new bitcoins entering the market, has further fueled speculation of an impending price surge.
Cautious Optimism from TradingView Analyst
According to the analysis, conservative traders might be better off waiting for a clear breakout before entering a position. However, more aggressive traders could consider selling near the upper resistance level of $68,830 or buying near the lower support level of $67,450.
The analyst provided the following trading suggestions:
- If the price breaks through $68,830, traders could consider buying, with a target range of $69,500 to $69,800.
- If the price falls below $67,450, traders could consider selling, with a target range of $67,300 to $67,000.
It’s worth noting that the analyst emphasized the fluid nature of market conditions and the possibility of updating the analysis in their guidance group as the situation evolves.
In a subsequent update, the analyst acknowledged that the price had fallen below the lower limit of the resistance range, suggesting a potential selling opportunity. The target price for this trade was set at $66,700, reflecting a more conservative stance compared to Jelle’s $12,000 prediction.
