This Pattern Explains Why BTC, Toncoin, Dogecoin Prices Slumped

The cryptocurrency industry was plunged into a deep darkness as the prices of Bitcoin, TON, Dogecoin and other cryptocurrencies crashed. Bitcoin dropped to $55,000, while TON and Dogecoin dropped to $6.62 and $0.094, respectively. Most altcoins, including Solana, Pepe and Cardano, also fell.

Bitcoin Double Top Pattern

There are both fundamental and technical reasons why Bitcoin’s price crashed this week. Technically, as mentioned above, the drop occurred after the coin formed a huge double top chart pattern on the daily chart.

The first small double top pattern occurred around $72,200 in March-April and the second occurred in June with the necklines at $60,884 and $66,573, respectively.

The neckline of the larger double top pattern was at $56,525, but the coin has broken below this, indicating a further decline. Measuring the size of the distance between the double top and the neckline, this sell-off will continue to around $44,000 in the short term. This view will be confirmed if the price of Bitcoin falls below the key support at $50,000.

Another risky technical item to watch is that Bitcoin is currently crashing below its 200-day moving average, which increases the chances of the coin forming a death cross. A death cross occurs when two moving averages cross each other.

Tongcoin, Dogecoin, Shiba Inu, and other altcoins all fell due to Bitcoin’s price fluctuations.

Weak fundamentals and asset sales

These weak technical factors coincide with even more bad news for Bitcoin. First, there are signs that assets received from Mt. Gox are about to be liquidated. These assets are starting to be moved to exchanges before being sold.

Secondly, the German government has already started selling off its Bitcoin holdings, and as a result, Bitcoin balances on exchanges have continued to grow in recent days, as shown below.

Third, Bitcoin ETFs have not seen significant inflows over the past few months, increasing the risk of weak demand.

Fourth, and most importantly, the industry is missing a big catalyst as we saw earlier this year, the first of which was the acceptance of a spot Bitcoin ETF. Following the Bitcoin halving by the Securities and Exchange Commission (SEC).

The only big catalyst remaining is acceptance of a spot Ethereum ETF.. While this is a positive thing, analysts believe its impact will be limited as it is already priced in.

Moreover, there are signs that Joe Biden may be forced to withdraw from the presidential race, potentially giving way to a younger candidate, which could increase the chances that Trump, who is viewed favorably by the crypto community, could lose the election.


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