Bitcoin has spent the past seven days trying to hold near $85,000, with a trading range between $83,200 and $86,000. Buying momentum has turned positive in the past 24 hours, but an interesting technical analysis of the current price action points to a looming downside risk.

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Crypto analyst Xanrox laid out a bearish case for Bitcoin in an analysis on the TradingView platform, arguing that the ongoing falling wedge pattern, often seen as a bullish indicator, may actually be a calculated trap set by whales. According to his analysis, Bitcoin could crash to $67,000 before another strong move upwards.

Bitcoin’s Falling Wedge That Might Not Be Bullish After All

Xanrox’s main argument centers on the widespread belief that falling wedges are bullish reversal patterns. Although this is often true when the wedge forms at the start of a trend, the current wedge is forming at the end of a broader trend, which is a different scenario altogether.

The daily candlestick timeframe chart shows the Bitcoin price moving inside a clean wedge structure while trading well below the 20, 50, 100, and 200 daily moving averages. This setup, according to Xanrox, paints the picture of a clear downtrend rather than a setup for a reversal.

The bearish outlook is not just about chart patterns; it’s also about market psychology and the mechanics of liquidity. Such a setup is likely being exploited by whales in institutions and banks with enough liquidity to influence price action.

These whales need retail buyers to create enough volume for them to offload or accumulate positions. By painting the illusion of a breakout, they can push retail participants into a false sense of opportunity, only to reverse the market and trigger stop losses across the board.

This outlook plays into the growing notion that Bitcoin is increasingly becoming more of an asset among institutions, primarily due to the rise of Spot Bitcoin ETFs.

Chart Image From TradingView: Xanrox

20% Price Move For Bitcoin This Week

Xanrox predicted a 20% move for Bitcoin this week. A 20% move to the upside from the current $85,000 range would see Bitcoin trading back above $100,000 and somewhere around $102,000. However, this predicted 20% move isn’t an upside move but a downside move. Particularly, the analyst identified $67,000 as the level Bitcoin is most likely to test in the coming weeks. 

The $67,000 price level is the primary target if the current wedge fails as expected, as it is the major support on the way down if $75,000 is broken. 

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Even if the predicted 20% downside move fails to materialize this new week, there is still the possibility of the move taking place in the coming weeks. The analyst suggests Bitcoin may attempt to retest the upper zone between $108,000 and $91,000 before heading lower.

At the time of writing, Bitcoin was trading at $84,280.

Featured image from Pexels, chart from TradingView

Investor interest in Bitcoin continues to remain subdued with Bitcoin ETFs witnessing a second consecutive day of outflows on Friday, May 10. Outflows from the Grayscale Bitcoin ETF seem to be stopping nowhere. On Friday, GBTC reported another $100 million in outflows, with the total outflows across all 11 Bitcoin ETFs crossing $84 million.

BlackRock’s ETF IBIT experienced an inflow of $12.4363 million on Friday, while Fidelity’s ETF FBTC saw an inflow of $5.3039 million.

Bitcoin ETFs Continue to Attract Traditional Players

Some of the top banking institutions have come forward to reveal their exposure to the spot Bitcoin ETFs. This shows that the Bitcoin investment product continues to remain a top choice of institutional players.

The world’s largest banking institution JPMorgan recently revealed that they have sizeable holdings in several different Bitcoin ETFs available in the market. JPMorgan’s investment portfolio demonstrates a diversified approach to the cryptocurrency sector, encompassing various ETFs.

In its disclosed holdings, the bank reveals ownership of 25,021 shares of Bitcoin Depot Inc., with a market value of $47,415. This investment is just one component of JPMorgan’s broader strategy, which includes a range of ETFs aimed at capturing opportunities within the cryptocurrency market.

Another banking giant Wells Fargo also disclosed its exposure to Bitcoin ETFs. Its recent filing with the US SEC indicates that the banking giant holds 2,245 shares of Grayscale Bitcoin ETF (GBTC).

BTC Price Tanks 3.5%

The Bitcoin price has tanked another 3.5% in the last 24 hours once again moving closer to the crucial support level of $60,000. Amid these continuous outflows, Bitcoin has not seen enough buying interest in recent times.

According to insights from on-chain data provider Santiment, traders are exhibiting limited interest in the “buy the dip” strategy as Bitcoin experiences a decline, dropping to as low as $60.2K today. This subdued response from the trading community reflects a prevailing lack of confidence, often indicative of prices nearing a bottom. Analysts recommend monitoring social interest levels to assess the persistence of Fear, Uncertainty, and Doubt (FUD) in the market.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.