Bitcoin’s sharp sell-off this week has sparked concerns across the market, with many pointing to escalating tensions between Israel and Iran as the primary catalyst.
While macro headlines triggered panic selling, the charts had already laid out the roadmap. A bearish shark harmonic pattern, coupled with a breakdown from key volume levels, suggested that a corrective move was highly probable. Notably, Bitcoin (BTC) was consolidating near the value area high earlier this week when tensions in the Middle East began escalating.
As news of a military confrontation between Israel and Iran broke, global risk sentiment weakened, leading to widespread liquidation across crypto markets. However, beneath the surface, technical structure had already shown signs of exhaustion. As predicted on June 10 in this analysis article, a shark harmonic pattern hinted at a full market rotation, which ultimately played out in textbook fashion.
Key technical points
- Bearish Shark Harmonic Completed: Pattern projected a retracement from VAH to VAL.
- Breakdown of Value Area High: Confirmed technical weakness and led to an impulsive sell-off.
- News of Israel-Iran Tensions Added Volatility: Macro uncertainty accelerated the move but didn’t initiate it.
- Value Area Low and Key Low Now in Focus: Price has tapped into strong support — a possible bounce zone.
BTCUSDT (4H) Chart, Source: TradingView
The move began with price consolidating above the value area high (VAH), a level that had acted as resistance throughout recent trading sessions. The confirmation of the shark harmonic came when Bitcoin lost the VAH, triggering a technical breakdown. From there, price moved quickly toward the point of control and then into the value area low, completing the harmonic structure.
While the drop coincided with rising geopolitical tension, particularly the developing military standoff between Israel and Iran, it’s important to note that this was not a random crash. The technical structure had already forecast a bearish expansion, and the news simply added speed and volatility to a move that was already in motion.
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Price has now wicked into the VAL, establishing a key swing low. This level is a critical support area. Holding above it may trigger a relief rally or even a full rotation back toward the VAH, provided short-term price action confirms stability.
What to expect in the coming price action
If Bitcoin holds above the value area low and builds support here, a recovery toward the POC and VAH is technically reasonable.
However, if this key swing low is lost with momentum, further downside may unfold. While the news shook the market, the chart had already warned, and this drop may ultimately serve as another long-term buying opportunity within Bitcoin’s broader trend.
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