Bitcoin (BTC) crashed hard the past few days. Most analysts and investors were quick to call it the final wave of capitulation. For a moment, it seemed to be the final wave of capitulation. However, soon afterwards Bitcoin (BTC) printed a pattern which is not a common sight in the crypto markets. The above 4H chart for BTC/USD is as bearish as a sell setup could get. The price has formed a very obvious bear flag the past few days. However, if it were the whole story, we might still have significant hope of a recovery from current levels considering Bitcoin (BTC) nosedived continuously for a long time and reached oversold conditions.
The RSI for the BTC/USD 4H chart presents an even more alarming picture. We see a bear flag being formed by the RSI which could come to fruition at the same time BTC/USD reaches the end of the bear flag. By that time, the conditions would be ripe for a final but more devastating fall for Bitcoin (BTC). Many in the crypto community still think that the price could fall to $4,000 or lower levels. However, the probability of that happening at this stage remains low. That being said, the probability of a fall to $5,000 is extremely high. Even though we remain bullish on the long term outlook of Bitcoin (BTC), there is not enough bullish momentum to turn the market around at this stage. The bears seem far more confident and have once again assumed control.