Bitcoin (BTC) price is currently showing a 3% decline after a strong weekly performance last week. In addition to this, Bitcoin's daily chart is hinting at a historical bearish pattern, raising concerns that this could test the $60,000 level again.
Bitcoin forms a bearish engulfing candlestick every day
Bitcoin’s 2.4% decline on October 21st formed a bearish engulfing pattern on the daily chart. A bearish engulfing pattern indicates a short-term or long-term reversal, with a success rate of 60% to 70%, depending on other market confirmations.
Bitcoin daily chart. Source: Trading View
Over the past seven months, bearish swallowing patterns near the range highs have been followed by sharp corrections. The drawdown deepened with each successive round, with prices dropping by as much as 26% between July 29th and August 5th.
However, the main bearish concerns stem from another series of events that have directly impacted prices over the past few months.
Bitcoin futures and derivatives markets have played a key role in BTC's recent price movement, with Bitcoin's open interest exceeding $40 billion as the price rose to $69,000.
Bitcoin open interest, spot CVD delta, price chart. Source: X.com
However, negative spot order book CVD continues to plague Bitcoin, highlighting the lack of spot buyers on exchanges. As observed on the chart, rising open interest, negative spot CVD, and indirect correlation with bearish swallowing patterns generally result in downside price movements for Bitcoin.
Keeping this in mind, and BTC's track record of corrections from previous setups, a drop to $60,000 would not be out of the ordinary.
Related: Bitcoin benefits from rising hashrate, inflation concerns, and crypto-friendly president
Spot Bitcoin ETF loses $79 million
Bitcoin institutional investors may have taken their foot off the pedal as the US ETF recorded an outflow of $79.1 million on October 22nd, and the price failed to rise above $70,000 on October 21st. be.
Previously, on October 10th, the ETF saw net negative inflows, resulting in $81.1 million in outflows.
This is a flowchart of Bitcoin ETF. Source: Farside.co.uk
Between October 10th and October 22nd, it added a whopping $2.6 billion in inflows, bringing total assets under management to a record $65 billion.
However, the current cooldown indicates that BTC is struggling at a major resistance level and some financial institutions could potentially exit.
Related: Bitcoin traders expect price to fall, but $73,000 remains short-term target
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should conduct their own research when making decisions.
