Bitcoin’s steep decline in recent months has investors wondering whether the worst of the decline is over, or whether more declines are yet to come. Market strategist Gareth Soloway said current chart patterns suggest a mixed outlook and could strengthen in the short term, but long-term risks remain.
A short-term bullish signal emerges
Bitcoin is currently trading around the mid-$60,000 range after falling significantly from its previous highs. Soloway said recent price movements indicate a short-term bullish setup is forming within a larger negative trend.
He described the situation as follows “There is a macro bearish pattern within the micro bullish pattern.” This means that even though the broader multi-month trend remains weak, price action could be headed for a rebound in the coming days and weeks. Technical indicators such as reversal candlesticks and consolidation patterns indicate the possibility of a short-term rebound.
Counter-trend pullbacks like this are common during large corrections, as traders temporarily buy dips before the larger direction becomes clear.
Macro trends still suggest downside risks
Despite the short-term positive signals, the broader chart structure continues to show lower highs and lower lows, a classic bearish pattern. Soloway said this large structure is similar to a “bear flag,” and historically it often resolves with additional downside movement.
He warned that further declines could follow if key support levels decline. In particular, a break below the $60,000 area opens the door to further losses and could push the price towards a much lower support zone.
Resistance zone between $80,000 and $85,000
On the upside, there was a strong resistance area between approximately $80,000 and $85,000, with the previous price pivot creating significant selling pressure. A sustained move above this area would be required to override the broader bearish structure and suggest a stronger recovery.
Until such a breakout occurs, many traders expect Bitcoin to remain in a volatile consolidation phase with intermittent gains followed by renewed selling pressure.
Long-term scenario depends on global market conditions
Soloway added that broader financial market conditions, particularly the performance of stocks, could play a big role in Bitcoin’s next big move. If global markets suffer a significant correction, cryptoassets could face further pressure as investors reduce exposure to riskier holdings.
