Bitcoin clawed back roughly $5,000 on Friday after a brutal dip briefly swept the price below $60,000, but the technical picture is turning uglier. The bounce came as the S&P 500 shed about $1.4 trillion in a single session, driven by escalating tensions between Israel and Iran. Despite the snapback, a bear flag pattern has formed on the daily chart, and analysts are watching for a potential slide to $49,000.
The $1.4 Trillion Macro Hit
Stocks got hammered Friday. The S&P 500 lost roughly $1.4 trillion in market cap as geopolitical fears spiked. The selloff bled into crypto, with Bitcoin touching as low as $59,100 before buyers stepped in. It's not the first time macro drama has dragged digital assets down this year, but the magnitude of the stock rout caught plenty of traders off guard.
Bitcoin's Sharp Bounce — and the Pattern That Followed
Bitcoin recovered about 8.7% from that intraday low, regaining the $60,000 handle. But the daily chart printed a bear flag — a continuation pattern that typically signals more downside. The flag's lower boundary sits around $49,000, an area that aligns with the bottom of an eight-month bull flag and old support-resistance levels from 2021. In other words, $49,000 is the next big test if the current support fails.
RSI at Crash-Like Levels
The Relative Strength Index (RSI) hit a low Friday that hasn't been seen since the March 2020 COVID crash. That's a stark reminder of how oversold the asset got in a single day. Oversold doesn't mean the selling is done — it means the move was violent, and the market needs time to reset.
Weekly Trendline Break Raises Questions
The weekly chart adds another layer of worry. The bull market trendline and the 200-week simple moving average have tracked closely since early January 2024. Friday's dip took Bitcoin below that trendline for the first time in months. That's a concerning development, though the old bear market trendline — which acted as a floor during the 2022 selloff — could step in again. A retest of that line might stop the slide, just as it did two years ago.
The market now waits to see whether that bear market trendline will hold. If it does, the $49,000 zone becomes a potential entry point. If it doesn't, the next support levels are further down. No one's calling a bottom yet.
