In today’s technical analysis, let’s examine Bitcoin, which has sharply reversed after testing new long-term highs.
Earlier this week, Bitcoin appeared to confirm a bullish continuation by breaking out above a pennant formation, defined by the converging black trendlines on the chart. However, this breakout turned out to be a false move—a classic bull trap. The rise above the pennant was short-lived and is now marked with a yellow highlight, denoting a false breakout.
Following this failure, Bitcoin quickly fell back inside the pennant and is now testing the lower boundary of the pattern. What's more, this level aligns with a critical blue uptrend line, which has been guiding the market upward since early April.
This confluence of technical levels forms a key support zone, and holding above it is essential for Bitcoin bulls to maintain any short-term positive outlook.
If the price closes a daily candle below the blue uptrend line, it will confirm a breakdown from both the pennant and the trendline—an extremely bearish technical signal. Such a move would open the door for a deeper correction, potentially driving Bitcoin significantly below the $100,000 mark.
As long as the support holds, there is still hope for a bounce, but pressure is clearly building. Traders should be prepared for a decisive move in either direction.