Bitcoin’s recent price action has taken a concerning turn as a bearish technical pattern emerges on the charts. After maintaining strength above $105,000, Bitcoin’s 30-day support above $100,000 appears to be under serious threat, with technical analysis suggesting a potential drop to $96,000.
Head and Shoulders Pattern Forms on Bitcoin Daily Chart
Prominent crypto analyst Titan of Crypto has identified a textbook head and shoulders formation on Bitcoin’s daily timeframe. This historically reliable bearish pattern consists of three peaks, with the middle peak (head) reaching approximately $111,814 in mid-May, flanked by two lower peaks (shoulders) at similar levels.
The pattern’s neckline, currently situated at $103,500, serves as a critical support level. A decisive break below this threshold could trigger a measured move toward $96,054, representing an 8% decline from current levels.
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Technical Indicators Support Bearish Outlook
Supporting the bearish case, Bitcoin’s RSI (Relative Strength Index) hovers precariously around the 50 mark on the daily timeframe. A break below this crucial midline typically confirms bearish momentum. The recent price action has already seen Bitcoin lose several key support levels at $110,000, $107,000, and $105,000.
Market Impact and Support Levels
Currently trading at $103,250, Bitcoin is testing the head and shoulders neckline resistance from below. The next significant support lies at $101,000, which could serve as the last defense before the projected $96,000 target. A breakdown at current levels could trigger broader market implications, potentially leading to capitulation across the cryptocurrency market.
Frequently Asked Questions
What is a head and shoulders pattern?
A head and shoulders pattern is a technical chart formation consisting of three peaks, with the middle peak being higher than the two surrounding peaks. It’s considered a reliable bearish reversal pattern when confirmed.
What are the key support levels to watch?
The critical support levels are $103,500 (neckline), $101,000 (intermediate support), and $96,000 (target level).
Could this trigger a broader market decline?
Yes, a confirmed breakdown could lead to increased selling pressure across the cryptocurrency market, potentially affecting other digital assets.