Bitcoin chart shows ‘diamond pattern’ with $96K target — What will kick off the downside?

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Bitcoin is enjoying a day of bullish price action, but any disappointment related to the markets’ anticipation of a crypto-related executive order from President Trump on Jan. 23 could trigger a correction in BTC (BTC) price.

Some analysts believe Bitcoin price could be headed to a correction below $96,000, based on emerging technical chart patterns, especially as markets remain increasingly sensitive to tightening economic conditions in the United States.

Bitcoin may correct to $96,000 based on “diamond pattern”

Bitcoin's BTCUSD price may be poised to a correction below $96,000, according to the “diamond” technical chart pattern, which indicates a momentum reversal for the underlying asset.

These chart patterns occur at local price tops or bottoms, but may only represent a temporary trend reversal, wrote crypto trader Blackmore, in a Jan. 22 X post:

“It’s quite a tricky setup, it’s usually best to wait for it to play out, before making a move, rather than trying to get the break from structure… Technical target for this is around $94,000 - $96,000.”

Bitcoin may see a reversal or lack of significant momentum for the next few months, wrote Ki Young Ju, the founder and CEO of CryptoQuant, in a Jan. 22 X post:

“Bitcoin might pull back or move sideways for months. Not sure the bull cycle is over as other on-chain indicators remain bullish.”

Ju’s predictions are based on the Bitcoin P&L Index, a momentum indicator that incorporates three key metrics to determine the optimal Bitcoin allocation strategy and deliver lower drawdowns for investors.

Can Bitcoin maintain $101k key support?

Bitcoin may avoid further downside as long as it remains above the key $101,000 support, according to popular crypto analyst Rekt Capital.

“Bitcoin once again failed to daily close above the $106,000 range high resistance,” the analyst wrote in a Jan. 23 X post:

“Bitcoin has once again revisited the Range Low of $101,000 for a retest. The retest is in progress right now and any downside wicks as part of a volatile retest could see price wick into the blue diagonal.”

A Bitcoin dip below $101,000 could introduce significant market volatility, as it would trigger over $1.34 billion worth of cumulative leveraged long liquidations across all exchanges, according to CoinGlass data.

Additionally, Bitcoin price may also be pressured by concerns over tightening monetary policy, according to Ryan Lee, chief analyst at Bitget Research. The analyst told Cointelegraph:

“A recent dip and concerns over potential global interest rate hikes have created short-term bearish sentiment. However, institutional buying, particularly from World Liberty Finance, may stabilize prices.”

Markets are now expecting the first US interest rate cut to occur on June 18, according to the latest estimates of the CME Group’s FedWatch tool.

Bitcoin chart shows ‘diamond pattern’ with $96K target — What will kick off the downside?

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