Bitcoin (BTC) Faces Bearish Pattern: Analysts Warn of Risk to $74,000

Bitcoin (BTC) faces significant bearish pressure, with analysts predicting a possible 34% decline to $74,000 due to the formation of a notable technical pattern. This troubling outlook is compounded by increased activities from whales taking large short positions, signaling that the current uptrend could be nearing its peak.

Rising Wedge Pattern Signals Weakening Momentum

As of October 15, Bitcoin is trading within a rising wedge pattern on the weekly chart, repeatedly testing critical support at the $110,000 level. Analysts warn that a breakdown below this support could initiate a sharp correction toward the wedge's lower boundary, resulting in a potential 34% drop to $74,000. Interestingly, this $74,000 level coincides with Bitcoin’s prior high, last recorded in March 2024.

From a technical analysis standpoint, divergence between price action and the Relative Strength Index (RSI) is widening, indicating weakening bullish momentum. Rising wedge formations often precede bearish reversals, further fueling concerns that Bitcoin’s current phase of consolidation signals the last stretch of its uptrend.

Market observer Captain Faibik remarked, “Although Bitcoin’s uptrend remains intact for now, momentum clearly appears to be fading. If the wedge support breaks, we can expect accelerated correction phases.” Renowned trader Peter Brandt shared similar concerns: “Before revisiting its all-time high of $126,000, Bitcoin could face significant turbulence. While the era of massive 80% pullbacks is behind us, seeing the price retest levels around $50,000 to $60,000 wouldn’t be surprising.”

Whale Activity Reflects Bearish Sentiment

Bearish sentiment among institutional players and market whales adds weight to analysts’ concerns. On-chain analytics platform Lookonchain recently revealed that a major whale established a $140 million short position on Bitcoin through the Hyperliquid market, using 5x leverage with a liquidation threshold set at $137,700.

"Another whale, 0xc2a3, just opened a 5x short on 1,240 $BTC ($140M) on #Hyperliquid.
Liquidation price: $137,700," tweeted Lookonchain.

Notably, this isn’t an isolated event. Another whale who had already initiated substantial short positions last week reportedly increased their stake by adding $500 million worth of Bitcoin shorts this week with 10x leverage. Such concentrated bearish activity by market whales underscores growing pessimism about Bitcoin’s near-term price trajectory.

NUPL Metric Indicates Overheated Market Sentiment

On-chain data further supports concerns about the current market’s vulnerability. Bitcoin’s Net Unrealized Profit/Loss (NUPL) ratio, which measures investor sentiment based on unrealized gains or losses, has transitioned from the "Optimism" zone into the "Euphoria" zone. Historically, movement into the Euphoria region signals that markets are at risk of topping, as sentiment becomes overly exuberant during bullish cycles.

This change in the NUPL metric underscores a bearish warning, suggesting that Bitcoin's market structure is overheating and vulnerable to corrective pullbacks. The combination of whales betting against Bitcoin and sentiment metrics flashing caution raises doubts about the sustainability of its current price levels.

Conclusion: A Critical Test for Bitcoin

Analysts agree that Bitcoin's ability to defend the $110,000 support zone will determine its next significant move. Failure to hold this support could pave the way for a deeper corrective phase, potentially toward the $70,000 to $80,000 range. With bearish technical patterns, heightened whale activity, and overheated market sentiment converging, concerns about a possible decline remain pronounced.

Market participants are advised to watch both technical levels and on-chain metrics closely in the coming weeks, as Bitcoin faces mounting pressure that could reshape its trajectory in the mid-term.