Bitcoin’s price action raises concerns after failing to break above critical resistance levels, with the appearance of bearish signals. According to an analysis shared on TradingView by analyst RLinda, Bitcoin may be on track to reverse last week’s gains and make a significant correction due to the formation of a bearish embrace pattern.

Failure to push above $69,000 signals a bearish retreat for Bitcoin

RLinda Analysis Bitcoin’s price trajectory is based on a up-to-date bearish engulfment candlestick pattern that develops on the daily candlestick timeframe. Last week, Bitcoin experienced a noticeable surge that brought the cryptocurrency to market sturdy shopping zone approximately $68,900.

Despite the bullish momentum, Bitcoin bulls were unable to push the price through the $69,000 resistance zone, facing repeated rejections as the cryptocurrency approached that level.

RLinda’s analysis has shown that this inability to break higher is happening led to the uprising a bearish engulfing pattern over the last three daily candlesticks, which may indicate that sellers are regaining control.

A bearish engulfing pattern, where the last candle completely engulfs the previous day’s candle, is a sturdy reversal signal that suggests that the upward momentum has run out. This pattern, combined with the failure to clear the $69,000 zone, indicates that Bitcoin could face a deeper correction.

RLinda’s goes further, emphasizing that the recent rally appears to be a false break from a falling resistance trendline that has been holding since Bitcoin hit its all-time high of $73,737. Since March, the descending trend line has been the ceiling for Bitcoin price increases. While last week’s rally initially appeared to break through, the subsequent rejection suggests the breakout was not sustainable.

That being said, the analyst notes that Bitcoin does has now returned to the consolidation phase just below this trend line. As Bitcoin continues to consolidate, the risk of a deeper correction increases.

How far can Bitcoin’s price correction go?

Looking ahead, RLinda predicts a potential correction in Bitcoin’s price, with the first downside target being around $65,000. If this level does not hold, further corrections could result in Bitcoin falling to $61,000, $58,000, and possibly even $57,000.

However, these are bearish prospects it is not set in stone. RLinda adds that the bearish structure could be invalidated if Bitcoin manages to break above $69,400. A break above would provide bullish momentum and a sustained break above the descending triangle.

At the time of writing, Bitcoin is trading at $66,670, down 0.6% over the past 24 hours. The current price action is consistent with RLinda’s forecast for consolidation below the downtrend resistance line.

Meanwhile, the coming days may determine just how much Bitcoin closes in October (uptober) in the green zone. Resistance levels to watch are $66,500 and $65,000, while support levels are $68,400, $69,400 and $71,500.

Featured image created with Dall.E, chart from Tradingview.com