Bitcoin bull run may be showing signs of slowing down, as recent charts point to potential bearish trends forming on the weekly timeframe.
Summary
- The Bitcoin bull run could be nearing its end as bearish patterns emerge.
- A rising wedge has formed on the weekly chart, signaling caution for traders.
- Demand for spot Bitcoin ETFs has decreased in recent days.
- Bitcoin price currently trades at around $112,835, down from its all-time high of $124,200 but still over 50% higher than April lows.
Weekly Chart Signals a Potential End to the Bull Run
The weekly chart shows that Bitcoin has enjoyed a strong bull run over the past few years. After bottoming at $15,463 in late 2022 following the FTX collapse, it surged to an all-time high of $124,200.
Closer inspection reveals that Bitcoin price has formed a rising wedge on the weekly chart, which is often considered a bearish signal. This pattern consists of two upward-sloping trendlines that converge over time. The upper line connects higher highs since March last year, while the lower line links rising lows since August. As these lines converge, a bearish breakout becomes more likely.
Additionally, a bearish divergence has appeared. While Bitcoin price has been climbing, key indicators like the Percentage Price Oscillator (a modified MACD) are showing lower highs and nearing the zero line. Similarly, the Relative Strength Index (RSI) has dropped from a high of 87.7 in February 2024 to 56 today, indicating weakening momentum.
The accumulation and distribution indicator has also flattened, suggesting that Bitcoin has moved out of the accumulation phase. Taken together, these technical signals hint that Bitcoin price may experience a strong bearish breakdown soon, potentially testing the 50-week moving average around $95,000.
Bitcoin ETF Demand Is Slowing
Data shows that institutional demand for spot Bitcoin ETFs has softened in recent weeks. Last week, ETFs saw over $1.17 billion in outflows, compared to $547 million in inflows the previous week.
Meanwhile, Bitcoin balances on exchanges have started to rise, reaching 2.25 million coins
The highest level since August 7. Increasing exchange holdings often indicate that investors are selling, adding further pressure on the Bitcoin price.
What This Means for Traders
While Bitcoin has gained significantly from its April lows, the combination of bearish chart patterns, weakening momentum, and declining ETF demand suggests caution. Traders should watch key support levels closely, particularly around $95,000, as any breakdown could lead to a larger corrective move.
