Bitcoin's Heikin Ashi Monthly Candle Turns Bearish, Analyst Warns of Potential 50% Drop

CMT-verified analyst Tony Severino has provided a detailed technical analysis of the Bitcoin market, offering insights into the ideal time to buy Bitcoin as the Heikin Ashi monthly candle turns bearish. Following the recent price increase above $94,000, Severino has outlined a clear strategy for navigating the next major move in the Bitcoin market.

Severino's analysis focuses on the Upper Bollinger Band, which is currently positioned at $108,000. He emphasizes that merely reaching this level, as Bitcoin did in 2021, is not sufficient to justify buying Bitcoin in anticipation of a price increase. Instead, Severino asserts that a full monthly close above $108,000 is necessary to confirm a breakout and continuation of the bullish trend. If Bitcoin fails to close above this level for a month, it could mirror the 2021 double top and fake breakout, potentially leading to another steep bear market.

Severino advises investors to closely monitor Bitcoin’s price action around this key Bollinger Band. He stresses the importance of capital preservation over succumbing to the Fear Of Missing Out (FOMO). With elevated risks and rising volatility, the analyst believes that clear confirmation signals are the only way to engage with the market safely.

In addition to his analysis of the Bollinger Bands, Severino has also noted that the Bitcoin Heikin Ashi candles have turned bearish. He shared a 12-week Heikin Ashi candlestick chart, which shows Bitcoin flashing early warning signs of a potential bear market. The chart highlights a critical moment where Bitcoin’s Heikin Ashi candle turned red for the first time since its previous price peaks in 2014, 2018, and 2022. Historically, such a signal has marked the beginning of prolonged bear markets and deep price corrections.

Further strengthening the bearish outlook, Severino pointed out that the Fisher Transform, a technical indicator used to detect trend reversals, is exhibiting a bearish crossover. The green Fisher line dropping below the red Trigger line aligns with previous cycles where these two signals indicated substantial declines in Bitcoin's price that lasted for months, if not years.

Severino's analysis provides a comprehensive view of the current state of the Bitcoin market, offering investors and traders a clear strategy for navigating the potential bear market. By focusing on key market indicators and price action, Severino's insights can help investors make informed decisions and preserve their capital in a volatile market.