Bitcoin (BTC) has recently formed a double top pattern, indicating a possible bearish trend reversal before the release of key data that could impact Federal Reserve interest rate decisions.
Bitcoin’s price has experienced significant fluctuations this month. After climbing to nearly $72,000 (close to the all-time high of $62,000 set in April), it has dropped below $60,000.
The price movement has created a double top pattern – a bearish technical indicator characterized by two consecutive tops, typically occurring after a significant uptrend. The second peak marks the end of the uptrend, and a break below the bottom between the two peaks confirms the reversal of the bearish trend.
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“Technically speaking, Bitcoin appears to be following a double top pattern, with support levels being tested. Unless confirmed, this pattern should be our baseline scenario. It could easily drop to $45,000 if not $50,000,” said Marcus Thielen, founder of 10x Research.
According to him, “However, we may see a steeper correction,” despite increasing bullish sentiment later this year due to the US election and consumer price index.
Nevertheless, the Federal Reserve’s preferred inflation gauge – the May Personal Consumption Expenditures (PCE) price index – is expected to show the slowest monthly core increase in over three years. This will strengthen the Fed’s case for resuming rate cuts in September, potentially supporting risk assets including Bitcoin.
