Bitcoin's path to $23,000 was a "hope rally" that, if it succeeded, could have meant that the cryptocurrency market was finally facing the reversal that everyone waited for so long. Unfortunately, the lack of buying power and trading volume pushed the price of the digital gold back to the local bottom.
Pattern that pushed Bitcoin down
Bitcoin had been moving in a bearish flag pattern for the last month, marking at least three local highs from $22,000 to $23,000. Unfortunately, none of the spikes ended up in a full reversal rally as the first cryptocurrency reversed back to local lows of around $19,200.
Luckily, we also did not see any drops to $17,000 after June 20, which shows that the market has most luckily capitulated, and the recovery rally is not possible because of the lack of inflows into the market.
Historically, Bitcoin should continue to move downward and reach the lower border of the formation before making another breakout attempt, while hoping that additional selling pushes the first cryptocurrency below the aforementioned pattern.
The bearish flag is one of the most common patterns for assets that move in sharp downtrends. They usually appear when the market needs to "cool off" before another spike up or plunge down.
Ethereum takes spotlight
Following the release of the Merge update date, Ethereum saw a massive 30% rally, and projects that will benefit from an upgrade like Lido Finance capitalized on the big news as their tokens spiked for 200%.
At press time, Ethereum is leading the market with a 25% rally in the last seven days, while Bitcoin is falling back to $21,000 and is still failing to recover.