The ongoing crypto market crash could worsen in the near term as the Bitcoin price flashes at least three risky patterns on the weekly time frame chart.
Summary
- Bitcoin price has formed a rising wedge pattern on the weekly chart.
- It has also formed a bearish divergence pattern, pointing to a crash.
- Such a crash would lead to a steeper crypto market crash.
Bitcoin price chart has formed risky patterns
The weekly timeframe chart shows that the Bitcoin (BTC) price has formed highly bearish chart patterns.
First, it has formed a bearish divergence pattern. The Relative Strength Index has formed a descending channel since January of last year, which is a sign of a bearish divergence pattern.
Similarly, the MACD indicator has been moving downward since December of last year, and the two lines have formed a bearish crossover pattern. Notably, the histogram bars have remained below the neutral point this month.
The Awesome Oscillator has continued falling since December. As such, the RSI, MACD, and AO indicate that the Bitcoin price has formed a bearish divergence pattern, which often leads to a prolonged bearish breakout.
Worse, BTC price has been forming a rising wedge pattern since July of last year. Its lower side connects the lowest swings in July of last year, April, and August of this year. The upper side connects the highest swings in December, July, and August.
The wedge’s two lines are now nearing their confluence levels, which points to a strong bearish breakdown in the near term. If this happens, the coin may drop below the psychological level of $100,000 and move toward support at $74,720, its lowest level in April.
A Bitcoin price crash would be highly bearish for the broader crypto market because its performance normally affects other altcoins.
BT price chart | Source: crypto.news
Crypto market has some bullish catalysts
Still, the crypto market has some bullish catalysts that may drive it higher in the coming months.
The first is that the Federal Reserve has started cutting interest rates, and odds favor the theory that the cutting cycle is just starting. The dot plot pointed to two more cuts this year, while analysts expect the central bank to cut more times in 2026, especially if Donald Trump replaces Jerome Powell as the Fed chair.
Additionally, historical data show that the fourth quarter is usually the best for the crypto market. The average Bitcoin price return in the fourth quarter since 2013 was about 85%.
Meanwhile, the Securities and Exchange Commission is expected to start approving altcoin ETFs in October, and recent data shows that there is robust demand for these assets from investors. DOJE ETF, which has an expense ratio of 0.75%, has already achieved $3.9 million in assets, while the XRPR has $10.9 million.
Therefore, the main Act 33 ETFs will likely have more inflows because of their low expense ratios and because their sponsors are more prominent companies such as Franklin Templeton and Invesco.