In today’s technical analysis, we turn our attention to Bitcoin, which enjoyed a strong start last week but is now entering a potentially dangerous territory. After peaking mid-week, Bitcoin saw a sharp pullback on Friday, followed by further declines over the weekend and into Monday. The shift in momentum raises concerns for the bulls and opens the door for a possible deeper correction.
The chart structure presents two rectangle formations, both marked in red, which have been key in recent price action. The first rectangle led to a legitimate bullish breakout, fueling a solid upswing. However, the second rectangle—formed more recently—tells a different story. Although Bitcoin initially broke out above this consolidation zone, the move quickly reversed, and price is now trading below the rectangle's upper boundary. This false breakout is marked with blue on the chart and highlights the fragility of recent gains.
Adding to the negative outlook, Bitcoin has also broken below a green uptrend line, which had been supporting the price since the previous low. The loss of this dynamic support line weakens the bullish narrative and indicates growing selling pressure.
Now, all eyes turn to the orange horizontal support, which represents the lows from last week. A daily close below this support would confirm the breakdown and serve as a clear sell signal, likely opening the path toward a more pronounced bearish phase.
At this stage, sentiment has turned cautious. Bulls need to reclaim the broken resistance quickly to prevent further downside. Until then, sellers appear to have the upper hand.