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A bearish chart pattern on Bitcoin’s daily timeframe threatens to send BTC price to new lows. Here’s what must happen to avoid it.
Market Update
Bitcoin price has been in a slump since hitting $108,353 on Dec. 17 and BTC’s recent drop below $92,000 has put many analyst on alert due to the looming confirmation of a bearish head and shoulders chart pattern.
A few daily closes below the pattern’s neckline at $92,000 could be followed by a decline to the pattern’s target at $79,500.
Chartered market technician Aksel Kibar has also set a (BTC) price target at $80,000 if the head and shoulders pattern is confirmed.
If the pattern acts as a H&S top, the price target is at 80K. This can be the pullback to the broadening pattern that completed with a breakout above 73.7K. $BTCUSD https://t.co/aWeNdWVkMz pic.twitter.com/QbGi08AfcH
— Aksel Kibar, CMT (@TechCharts) December 26, 2024
In terms of Bitcoin’s day to day price action, recent dips into underlying bids are being absorbed, such as the recent dip to $91,500, but each of these dip buying instances are met by selling upon BTC’s return to the intraday range high.
According to popular crypto trader Skew, “shorts are the dominant positioning here” and, “further aggressive shorting would mean the market expects an immediate breakdown” from Bitcoin’s current range.
$BTC
Previously we had de-risking & hedge flowcurrently shorts are the dominant positioning here, will be watching for further aggressive shorting
further aggressive shorting would mean the market expects an immediate breakdown of from current value range
in the odds of a… https://t.co/ygLzAdNmT5 pic.twitter.com/XgInc3xo3W
— Skew Δ (@52kskew) December 30, 2024
Skew stressed the importance of the $94,000 level, saying,
“I think failure to reclaim $94K with market remaining supply heavy from spot, likely results in the final flush.”
BTC/USD spot at Coinbase, alongside spot and futures CVD. Source: Trdr.io
Basically, a series of 4-hour closes above $94,000 during the trading day will be essential to protecting the current range. Over the last week, spot selling has been the dominant action in the market, and a majority of the perpetual futures market is tilted toward margin shorts, so holding $94,000 as the lowest rung of the range ($94K to $99K) would be the first step toward invalidating the bearish head and shoulders pattern on the daily time frame.
This article first appeared at Cointelegraph.com News
