Bitcoin is creating a double top pattern reminiscent of 2021

Bitcoin is showing signs of a double top pattern, raising concerns about a potential market correction similar to the one experienced during the bullish market of 2021.

Alan Santana, a market analyst who highlighted this potential structure, has warned of possible bearish movement, pointing out key levels to watch if a correction begins.

Familiar Pattern Emerges

In a recent analysis, Alan Santana observed similarities between the current price action of Bitcoin and the double top formation noted in 2021.

At that time, Bitcoin peaked at $64,895 in April, followed by a higher peak of $69,000 in November. This price action led to the formation of a double top, which ultimately caused a significant decline.

Santana noted the volume increase before the first peak and a decrease before the second peak. This trend indicates dwindling market participation, a bearish sign.

Interestingly, a similar trend is emerging in 2024. Bitcoin reached an initial peak of $73,794 in March along with rising volume. However, as it approached a new high in late October, the volume sharply declined.

Santana interpreted the low volume as a strong indication of limited retail activity, with the market primarily driven by large players or whales. This drop in participation could result in a serious downturn if the double top structure holds.

Bitcoin Faces Bull Trap Risk

Four days ago, Santana cautioned that the latest upward movement might be a "false bullish breakout" or a "bull trap." He highlighted that Bitcoin had initially breached resistance, which often leads traders to become overly optimistic.



However, he warned that the week was just beginning, and without a strong close above resistance, there was a risk of a sharp reversal. Market veterans like Peter Brandt have also given similar cautionary advice amid recent increases.

Santana pointed out that genuine breakouts are typically accompanied by a surge in trading volume, which was absent in this case.

Lower-than-expected volume suggests a lack of confidence in the movement, making it likely that Bitcoin may close the week lower. He emphasized that if Bitcoin closes below $68,035, it would confirm a bull trap with a red candle and a long upper wick indicating a failed breakout.

Nevertheless, Bitcoin managed to finish the week above $68,035. Despite this, the close resulted in a Gravestone Doji formation, as reported recently by The Crypto Basic. If another weak candle appears this week, it will affirm the bearish pattern.

Key Bitcoin Levels to Monitor

In his analysis, Santana identified $70,000 as a critical threshold. A weekly close below this level would confirm a bearish scenario, while a close above $74,000 could signal more optimistic trends.

He stressed that Bitcoin is trading near the peak, a traditionally risky zone for long positions. Santana urged caution, suggesting that even if prices rise temporarily, the market may still face a reversal.

Additionally, the analyst pointed out that several leading altcoins are not following Bitcoin's rising trajectory, which is unusual in bullish conditions.

Typically, altcoins tend to follow Bitcoin's lead when it rises, but the lack of such correlation now supports the notion of a "fake" move, potentially driven by a few large holders rather than broad market support.

Santana highlighted important support levels to watch in case of a downturn, considering $55,000 as the first major support, followed by $44,000 and $36,000. If Bitcoin fails to maintain these levels, a more severe drop could follow.

Long-term Outlook for Bitcoin

Meanwhile, in the long run, Santana believes that the current market structure may lead to a deeper correction before the trend reverses. He indicated that Bitcoin might require several weeks of consecutive red candles to reach a new low.

However, he also expressed optimism that once a bottom is established, the market might experience sustained growth. This could potentially pave the way for a bullish run leading up to the 2025 rally following the U.S. presidential elections.