Bitcoin (BTC) Recovery Stalls as Double Top Bearish Reversal Pattern Emerges

Bitcoin's (BTC) recovery looks to have run out of steam with an emergence of a double top bearish reversal pattern

Bitcoin (BTC) on Friday stalled in recovery from the recent downturn, setting the stage for a bearish double top reversal, according to technical analysis.

Bitcoin's recovery from the recent downturn seems to have hit a snag, setting the stage for a bearish double top reversal, according to technical analysis.

After failing to break above $87,400 last week, BTC/USD is now testing the crucial neckline of the double top at around $86,000. A drop below this level could open the door for further declines.

Chart: TradingView

Bitcoin peaked at around $87,400 last week, with prices pulling back to $84,000 on Friday. From there, the cryptocurrency staged a recovery, rising back above $87,000 before stalling again. This sequence of two prominent peaks at roughly the same level, separated by a trough, suggests a classic double top formation.

Double top formations are bearish candlestick patterns that typically signal the end of an uptrend. They usually occur when prices rise to a peak, pull back, and then attempt to rise again to the same peak. However, buying pressure stalls, preventing prices from making new highs.

After the second peak, prices typically drop below the neckline, the support level between the two peaks. In the case of bitcoin, this neckline lies at around $86,000.

A drop below the neckline could open the way for further declines toward $75,000 or lower in the short term. However, long-term charts continue to indicate that the asset remains in an ascending range.

Rising U.S. tariffs had been a major point of concern for traders, especially after the recent escalation. However, a slight cooldown in this narrative could buy some time for risk assets.

Moreover, traders reacted positively to the U.S. Federal Reserve’s dovish stance on inflation. In the minutes of its March policy meeting, Fed officials said they would move “quickly and decisively” to cut interest rates if needed to return inflation to the 2% goal.

However, the lack of altcoin correlation with bitcoin’s recent moves hints that the current price action might lack broad market support, raising the possibility of a “fakeout” rally.

A potential drop in bitcoin will likely spread over to major tokens, denting recent gains and hopes of a lasting rally.

Dogecoin (DOGE), heavily influenced by market sentiment and speculative trading, could see amplified losses if bitcoin’s bearish pattern plays out, while XRP might see reduced momentum, especially given its sensitivity to market sentiment and regulatory developments.

Solana could be particularly sensitive due to its recent volatility and technical indicators — with it coming close to forming a “death cross” (a 50-day moving average crossing below the 200-day) in mid-April, a pattern that historically leads to deeper losses.