- Crypto analyst Ali Martinez predicts Bitcoin could drop to $40,600 due to a TD Sequential signal indicating a potential price reversal.
- Key support levels to watch are $51,000 and $40,600, with the latter implying a significant 28% decline from the current price.
Bitcoin’s price is facing a potential significant downturn, with predictions suggesting it could fall to the $40,600 level. This forecast comes from crypto analyst Ali Martinez, who has identified a concerning pattern in Bitcoin’s two-month price chart.
Understanding the TD Sequential Signal
Martinez’s analysis centers around the Tom Demark (TD) Sequential, a technical analysis tool widely used to spot likely price reversals in various assets, including cryptocurrencies. The TD Sequential works through two main stages: setup and countdown.
During the setup phase, candles of the same color are counted up to nine, signaling a potential turnaround point once completed. Specifically, green candles indicate a sell signal, while red candles suggest a potential bottom. After the setup phase, the countdown phase begins, counting candles up to thirteen, pointing to a probable top or bottom upon completion.
Bitcoin’s Current Situation
Recently, Bitcoin has completed a TD Sequential setup with nine green candles, indicating a potential peak. According to Martinez, this setup completion is a critical indicator of a possible price reversal. The cryptocurrency’s two-month price chart, shared by the analyst, underscores this setup’s completion.
Following the appearance of this signal, Bitcoin’s price has been on a decline, currently falling below the $57,000 mark. This pattern implies that the bearish influence of the TD Sequential signal might be taking effect.
Key Support Levels to Watch
Martinez highlights a crucial support level at $51,000, which aligns with the 0.236 Fibonacci Retracement level from Bitcoin’s recent high. Fibonacci Retracement levels are mathematical ratios derived from the Fibonacci sequence, used to predict potential support and resistance levels in a price chart.
If Bitcoin breaches the $51,000 support, the next significant Fibonacci ratio points to a decline to $40,600, corresponding to the 0.382 Fibonacci level. This deeper support level would imply a drawdown of over 28% from Bitcoin’s current price.
Market Outlook
Over the past day, Bitcoin has continued its downward trend, with its price now dipping to $56,600. The trajectory from here remains uncertain, as market watchers await to see if these predicted support levels will hold or if Bitcoin will experience a further decline. The coming weeks will be critical in determining whether Bitcoin can stabilize or if it will head towards the predicted $40,600 level.
While the TD Sequential signal points to a bearish outlook, the support levels highlighted by the Fibonacci Retracement could provide crucial insights into Bitcoin’s future price movements. Traders and investors should closely monitor these levels to navigate the potential downturn effectively.
