This is a daily analysis by CoinDesk analyst and chartered market technician, Omkar Godbole.
We’ve probably all heard this phrase: “Once is an accident, twice is a coincidence, three times is a pattern.”
The old saying is perfectly applicable to bitcoin market, where Friday’s drop marked the third time that bulls failed to sustain gains above the critical trend line drawn from the 2017 and 2021 highs, raising the possibility of a deeper drop to $100,000 or below.
This repeated inability to hold above that level highlights persistent resistance, suggesting that the trendline is now a key battleground that likely defines the limits of bullish strength in this cycle. CoinDesk highlighted trendline resistance a month ago, noting that the bulls had twice failed to sustain gains above it.
The long wicks on the July, August and October candles indicate bullish fatigue above the trend line.
At the same time, the MACD histogram on the monthly chart, while still positive, is lower than during the December-January rally, when BTC first surpassed $100,000, indicating weakening bullish momentum. MACD, a moving average based indicator, is widely used to identify trend changes and trend strength.
The daily chart below also shows a bearish outlook.
The strong reversal of the channel’s expanding resistance, combined with negative readings on the standard (12, 26, 9) and long-term (50, 100, 9) MACD histograms, indicates that the path of least resistance is down.
The longer duration histogram, which uses the 50-day and 100-day EMA and a 9-day EMA to smooth the signal, is significantly slower and less sensitive than the default setting, but is better suited for filtering out short-term market noise.
Taken together, the monthly and daily charts suggest room for a drop to sub-$100,000 levels, marking a test of the lower end of the expanding triangle. On the way down, the 200-day simple moving average of $107,000 could also offer support.
The bulls will need to achieve a break above $121,800 to invalidate the series of lower highs and reverse the bearish outlook. At the time of this publication, BTC changed hands at $114,800, according to data from CoinDesk.
