Bitcoin is entering another decisive period after spending recent months trading inside a higher-timeframe ascending range. Technical analysis of the daily chart setup shows the Bitcoin price moving inside an ascending channel structure, but the situation is becoming more precarious as the cryptocurrency approaches its lower boundary.
Bitcoin’s Ascending Channel Is Starting To Look Like A Trap
At the time of writing, Bitcoin is trading around $69,316 after falling almost 5% on the day, with the intraday move reflecting a drop from $72,926 to a low around the current price. This price action has now locked Bitcoin below the $73,000 to $76,000 zone, which acted as a major battleground between buyers and sellers last week.
The concern now is that Bitcoin may be setting up a trap for traders who are chasing a clean continuation pattern without waiting for confirmation. The ascending channel still offers bulls a path back toward $79,000, but the same chart also highlights how quickly the setup can turn into a breakdown if support fails.
The daily chart shows Bitcoin building an ascending channel from the February low, with a sequence of higher lows forming across March up until now. This type of structure can appear constructive at first glance, as each major pullback has held above the previous one.
However, the upper side of the structure has already exhibited signs of weakness. The structure shows a higher high above $82,000 in early May, but Bitcoin failed to establish a stronger continuation from that point. The move eventually rolled over, and Bitcoin has returned to the lower side of the channel, now testing whether price action will create a higher low. This scenario might, however, be a trap waiting for bullish traders.
How To Avoid The Trap As Bitcoin Risks A Drop
Many traders may see the green ascending support line and assume that another bounce is automatic, especially since Bitcoin has respected that diagonal several times. Notably, crypto analyst Void is leaning towards a break below the structure, which would turn the higher lows into a failed pattern and potentially open the door for a decline to anywhere between $54,000 and $58,000.
There are two possible scenarios for how Bitcoin’s price action could unfold from this point. If the current support level holds, the rally may continue, pushing Bitcoin back to $79,000 and possibly above $80,000. However, if support breaks, Bitcoin could first retest $75,000 as a trap for traders before entering a deeper decline to as low as $54,000.
Therefore, avoiding the trap means not treating the first bounce as proof of recovery. The Bitcoin price can still produce a short-term rebound to as high as $75,000 within the weak structure.
