Bitcoin's price broke down from a bear flag pattern that had been forming over the past four months, with analysts now eyeing a downside target at $66,000. The move came alongside a sharp drop in the daily Relative Strength Index to levels last seen during the March 2020 COVID crash bottom, and a Monday outflow of 6,570 BTC from U.S. spot Bitcoin ETFs.
The bear flag and the $66K target
The bear flag, a four-month chart pattern indicating continued downward momentum, finally resolved to the downside this week. Bitcoin is currently holding support at $70,000, but that level is getting tested. The next key level sits at $69,000 — the top of the 2021 bull market. If that fails, the target becomes $66,000. Below that, the floor drops to $60,000.
It's not a clean breakdown yet. Price is still above $70,000 as of this writing, but the pattern has been broken.
RSI readings echo COVID panic
The technicals are flashing rare signals. The daily RSI has dropped below 30.00 — oversold territory that was only reached once before in the last six years: the March 2020 COVID crash bottom. The 4-hour RSI, meanwhile, has fallen to its lowest level since the bear flag started forming four months ago. That could hint at a potential reversal, but oversold doesn't mean the selling is done.
Historically, a daily RSI below 30 has preceded major bottoms, but this time it's happening alongside a pattern breakdown. The two don't always align.
ETF outflows add pressure
U.S. spot Bitcoin ETFs recorded net outflows of 6,570 BTC on Monday. That's the kind of supply-side pressure that reinforces bearish sentiment. When institutional money pulls back, it often accelerates the move lower — or at least removes a key source of buying support.
The outflow figures come as the broader market grapples with uncertainty. No single catalyst has been named for the move, but the combination of technical and flow data is hard to ignore.
What comes next
If the pattern holds, a retest of the breakdown level is possible. In two of the last three major pattern breaks, price has revisited the breakdown zone before continuing lower. That would mean a bounce back toward $73,000-$74,000 before another leg down.
Should $66,000 fail to hold, the next major support is $60,000 — a level that hasn't been seen since early 2024. Whether the daily RSI can produce a reversal before then is the open question. The next few days will tell.
This article is for informational purposes only and does not constitute investment advice.
