Bitcoin (BTC) prices continue to trade at depressed levels in what has been one of the quietest periods in the history of the cryptocurrency market. Meanwhile, some technical and fractal setups suggest that the Bitcoin/USD pair could drop to lows as low as $21,750 in the coming months.
Let’s take a closer look at the recent support levels to determine how low Bitcoin price can sink.
Bear Flag Channel Hints at $23,000 BTC Price
Since mid-August 2023, Bitcoin has been consolidating within a sideways trading range with resistance at $26,670 and support at $25,650. In short, BTC price breaking out of this range is a reaction to fundamental news, such as new Bitcoin ETF applications and FTX liquidation concerns.
But overall, traders are keeping BTC price within the range of $25,650-26,670. Broadly speaking, this range looks like a “bear flag,” a bearish continuation pattern characterized by the formation of a consolidation channel after a strong downtrend.
As a rule of technical analysis, the bear flag disappears when the price breaks out of its descending range and falls to the height of the previous downtrend. Applying these parameters to the ongoing Bitcoin price consolidation puts its bear flag target at around $23,000.
In other words, BTC prices could be down nearly 15% from current price levels by the end of the year.
Bitcoin Bear Market Support Setup
Bitcoin bear markets from 2017 have typically exhausted near common uptrend line support, as shown below. BTC price tested the trend line in November 2022 at around $16,750 and has since risen 70%.
That said, Bitcoin may have bottomed out in the ongoing bear market. However, the price needed to decisively break above the 0.236 Fibonacci line near $28,350 to confirm its long-term bullish recovery based on historical fractals – but it failed to do so.
Related: Bitcoin’s cycle is changing — Bloomberg analyst Jamie Coutts explains how and why
Bitcoin is currently trading below the 0.236 Fib line, raising the possibility of a pullback back to bearish trendline support also near $23,000.
Bitcoin’s “Death Cross” Is Coming?
Bitcoin is close to forming a death cross between the 50-day (red wave) and 200-day (blue wave) exponential moving averages (EMA).
This is Bitcoin’s third death cross formation during a period of Fed rate hikes, with the previous two crossings occurring before prices fell by 17-18%.
Therefore, if the fractal reappears, the bearish BTC price target in this scenario would be around $21,750.
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