• Following the formation of a bearish swing failure pattern, the price of bitcoin flashed a weekly sell signal.
• BTC may try to break beyond the previous ATH of $69,138 before any possible reversal.
• The weekly imbalance is a critical zone where buyers could enter, spanning from $59,111 to $53,120.
• The statistics on outflows will now significantly affect the mood of the market as ETF inflows slow down.

Over the last two weeks or so, there has been a noticeable decrease in the upward velocity of Bitcoin (BTC). A bearish indication on the weekly and an unclear prognosis on the monthly were the results of this development. Therefore, there may be unknown sell-offs of BTC.

Bearish SFP interpretations for bitcoin

A bearish Swing Failure Pattern (SFP) was verified on March 17, according to Bitcoin’s weekly chart. When the price tries to break over a high resistance level but is unable to maintain momentum, this technical indicator appears during an upswing. This phenomenon results in a reversal of the price trend and frequently indicates a possible change in market mood from bullish to pessimistic.

The attempt by Bitcoin to break over its previous all-time high (ATH) of $69,138 was not successful in maintaining the bullish momentum long enough to result in a weekly closing above the ATH. The candlestick closed below it, resulting in the bearish SFP.

Context of Bitcoin’s sell signal

• Profit-taking and Bull Exhaustion: Following an unsuccessful ATH sweep, the SFP may indicate that early investors are taking profits. Before the uptrend restarts, there may be a brief retreat into a trading range as a result of this profit-taking.
• Bearish Reversal: In a more pessimistic scenario, the SFP may signal the start of a trend reversal. The previous strength was a bull trap, drawing purchasers in before a significant drop. This view was first observed on the monthly chart in October 2021, when the price formed a bearish SFP, sparking a bear market and causing a 77% decline in Bitcoin.

Considering the state of the market, as previously stated, the bearish SFP does not point to a turnaround. Alternatively, the sell signal can indicate that momentum is running out. Investors should anticipate a possible retreat into the weekly imbalance, which is now trading between $59,111 and $53,120.

The monthly chart has yet to show any indications of recovery or a possible bounce, even though the weekly chart does. There’s also the monthly imbalance, which ranges from $59,111 to $49,027. Ideally, BTC should close higher than $56,975. Should this not be accomplished, the $54,069 support level may need to be adjusted.

The impact of BTC ETF flows needs to catch up.

As was mentioned in a prior post, the ETF flow data is crucial in affecting the market. The decrease in ETF inflows, which started on March 13 and reached $1.04 billion, has persisted, and as of March 20, $261 million had been removed, marking the third outflow in a row.

Therefore, the price of Bitcoin is expected to correct to the previously indicated levels if the outflows continue to prevail.

The bullish trend is still present over a longer time horizon, according to the data, but a weekly closure below $53,120 will refute this theory by indicating a shift in mood in favor of bears. This would raise the possibility of a correction to the $45,156 critical level.