Bitcoin (BTC) price has been rejected by a long-term resistance zone and has formed two bearish patterns. It is likely to continue to decline in the coming days.
Weekly outlook
Bitcoin completed an inverse head and shoulders (H&S) pattern in the week of March 13-20. This technical pattern has a target of $35k, alculated by connecting the height of the pattern to the breakout point.
However, Bitcoin encountered strong selling pressure at the long-term resistance zone of $31,000. Currently, it has formed a bearish engulfing candlestick pattern on the weekly time frame (blue ellipse). This is a bearish pattern, indicating the bears has taken over the market.
Therefore, BTC price is likely to continue to decline towards the neckline of the inverse head and shoulders pattern at $25.2k.
Three black crows pattern
After being rejected by the $31k resistance zone on April 19, Bitcoin formed three consecutive bearish candles on the daily time frame. As these three candles have long bodies and short shadows, this has formed a three black crows pattern (red ellipse).
This is a pattern that signals a reversal of the trend from bullish to bearish. Therefore, the current decline of Bitcoin is likely just beginning.
If so, Bitcoin is likely to break down below the nearest support zone at $26.5k and decline to the next support zone of $24k-$25.3k, formed by a horizontal support zone and the Fib 0.5-0.618 zone.
Conclusion
Technical signals show that Bitcoin has started a deep correction. BTC price is likely to break down below the support zone of $26.5k and decline to the next support zone of $24k-$25.3k.
Although there will be mild recoveries on the lower time frames, it is likely to face strong selling pressure from the bears.
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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