Bitcoin Faces 7% Drop Risk as Bear Flag Pattern Emerges

Coin WorldThursday, Jun 5, 2025 10:38 am ET
1min read

Bitcoin (BTC) is currently facing a bearish signal after failing to break above a major resistance level, according to a closely followed crypto strategist. Analyst Justin Bennett has shared his insights with his followers, suggesting that Bitcoin may be forming a bear flag pattern, which could lead to a decline of more than 7% from its current value. Bearish flag patterns are used in technical analysis to forecast abrupt downward movements. They occur when the price consolidates upwards after a strong downtrend but fails to break through a key support level.

Bennett's analysis includes a different perspective on Bitcoin, highlighting the April trend line break, the failure to hold above $106,600, and a potential bear flag below resistance. He has set a target range of $97,000-$98,000 for Bitcoin, with an invalidation point at $106,600-$106,800. This analysis suggests that if Bitcoin fails to break above the resistance level, it could experience a significant pullback.

However, Bennett also notes that Bitcoin may not dip below six figures if the stock market continues to rally, given Bitcoin's historic correlation with stocks. He acknowledges the uncertainty surrounding the US stock market and its potential impact on Bitcoin's price movement. Bennett's analysis also includes the whale versus retail delta indicator (WRD), which gauges the bullish sentiment between whales and retail traders. A declining WRD value is bearish for Bitcoin, as whales tend to be better predictors of market direction. According to Bennett, the WRD value is trending lower, indicating that whales are increasing their short exposure to Bitcoin compared to retail traders.

Bitcoin is currently trading at $105,069, down 1.2% in the last 24 hours. The strategist's analysis suggests that traders should be cautious and focus on key support and resistance levels while maintaining disciplined risk management. Although a bullish reversal remains possible, the current outlook urges caution in the crypto market.

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