Bitcoin (BTC) Price Analysis: Forming a bearish engulfing K-line pattern, flashing the first "obvious" bearish signal since May.

Bitcoin (BTC) started this week with a high of $123,000 and has been in a pullback since, currently reporting around $118,442 during the Asian early session today (17th). The daily chart for Bitcoin has just flashed its first clear bearish signal since early May, forming a bearish engulfing candlestick pattern, reinforced by a shooting star candlestick pattern.

Previously, the price of Bitcoin rose by 19% in 21 days, indicating that the bullish momentum may be weakening.

(Source: Trading View)

According to data from CryptoQuant, the Miner Position Index (MPI) has soared to 2.78, reaching its highest level since November 2024. This index measures the ratio of Bitcoin transferred to exchanges by miners compared to the one-year average. Readings above 2 generally indicate increased selling pressure, which may lead to short-term price resistance. However, the current MPI level is still far below the historical highs of previous bull market cycles.

(Source: CryptoQuant)

In terms of derivatives, the Hyblock Capital platform warns that the open interest (OI) of Bitcoin contracts is approaching the "bubble zone." Historically, when this situation coincides with the Fear and Greed Index falling into the "extreme greed" zone, the market usually forms a local top and then experiences a sharp pullback. The "thick red dot" in the chart refers to the situation where these two signals appear simultaneously. However, these signals typically operate over a longer time frame, so investors should not be too hasty in making trading decisions.

(Source: X, Trading View)

Is it time for Bitcoin investors to worry or to stay confident?

The recent price fall of Bitcoin has triggered a wave of panic selling, with analyst Axel Adler Jr.'s data showing that nearly 50,000 BTC were sold at a loss in just 24 hours. This move reflects the anxiety and impatience of investors after BTC suddenly fell from its recent high.

(Source: CryptoQuant)

However, beneath the surface of panic, there is a strong buying power hidden. The cost basis distribution heat map shows that investors seized the opportunity to increase their holdings of over 196,600 Bitcoins (equivalent to more than 23 billion USD) in the price range of 116,000 to 118,000 USD. This clearly indicates that despite short-term fluctuations, long-term confidence still exists.

From a technical perspective, as long as the price remains above the key support level of $112,000, Bitcoin will maintain a positive bullish structure. After a nearly 19% rise, a period of moderate pullback or consolidation is needed to cool down the market, reduce high leverage, and weed out the impatient investors.

Although the recent bearish engulfing K-line pattern may indicate a temporary weakening of bullish momentum or a potential short-term reversal, it is not enough to break the main trend. As long as the support area around $112,000 is held, the possibility of Bitcoin resuming its upward trend remains high.