An analyst has explained how Bitcoin could witness a drop to the $40,600 level based on a pattern forming in its 2-month price chart. Bitcoin has seen a TD Sequential Sell Signal on its 2-month price chart.
In a new post on X, analyst Ali Martinez discussed a Tom Demark (TD) Sequential signal that has formed in the 2-month price of Bitcoin. The TD Sequential is a technical analysis indicator used to spot probable reversals in asset prices. This indicator involves two phases: setup and countdown.
In the first setup, candles of the same color are counted up to nine. Once nine candles are counted, the asset may reach a turnaround point. If green candles led to the setup's completion, a sell signal is given. Conversely, red candles suggest a bottom may be near.
The countdown phase, similar to the setup, counts candles up to thirteen. After these thirteen candles, another potential top or bottom may be reached. Bitcoin recently completed a TD Sequential setup with nine green candles, implying a potential top. As BTC is already declining, this bearish pattern may be taking effect.
Analyst Martinez highlighted a support level at $51,000, corresponding to the 0.236 Fibonacci Retracement level. If this support is breached, Bitcoin could further drop to $40,600, the 0.382 Fibonacci Retracement level, implying a 28% decline.
Bitcoin's price has dipped to $56,600, continuing its latest decline. It remains to be seen how the asset's trajectory plays out.
