Bitcoin (BTC) Price Has Not Bottomed Yet, Here’s Potential Target
The price of Bitcoin (BTC) is still moving within a bearish structure. It is likely to continue its decline towards the target of the head and shoulders pattern at $23,500.
Deviation above the breakdown level
The Bitcoin (BTC) price broke down below the head and shoulders pattern on May 11th and confirmed the neckline of the pattern as resistance three times (red arrows). This shows that the bears have taken control of the market.
Although the bulls pushed BTC price above the neckline of the pattern on May 28th, it turned out to be a deviation (red ellipse). Such deviations trap aggressive bulls who believe that the previous downtrend has ended. Therefore, it often leads to a sharp drop afterward.
If that’s the case, the price of BTC is likely to continue its decline towards the target of the pattern at $23,500, calculated by projecting the height of the pattern onto the breakdown point. Since this target also coincides with a long-term ascending support line, it may provide a rebound once reached.
The daily RSI indicator supports the possibility of further decline as it moves back below the 50 level and slopes downward.
The Bitcoin price has formed a bearish structure since reaching a local high at $31,000 on April 14th, shows that the main trend is down.
While the BTC price creating a bullish engulfing pattern on June 6th (blue ellipse) is a good signal for the bulls, it is not enough to invalidate the current bearish structure.
To invalidate this bearish structure, the BTC price needs to surpass its key level at $28,400. Until then, the bears remains in control of the market.
Breaking below the lowest point of the bullish engulfing pattern at $25,370 would signal the continuation of the downward trend.
The most likely scenario indicates that the BTC price will continue its decline towards the target of the head and shoulders pattern at $23,500.
A breakout above the $28,400 level would invalidate this possibility.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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