This is a daily technical analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Bitcoin’s BTC broader outlook is constructive, but its short-term prospects remain bleak, according to technical analysis.
The leading cryptocurrency by market value has bounced back to nearly $104,000 from its overnight low of $104.30, alongside positive action in U.S. equity futures.
However, a closer look at the hourly price chart reveals that the bounce is likely a classic breakdown and retest play – the cryptocurrency dove out of a head-and-shoulders pattern on Thursday, signalling a short-term bullish-to-bearish trend change, and prices are now revisiting the breakdown point, called the neckline.
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This happens because early sellers – those who shorted at the time of the breakdown – are quick to take profits, consistent with the prospect theory of behavioral analysis.
It leads to a bounce that usually runs into fresh selling at the neckline from those who missed the initial breakdown. These fresh shorts lead to the next leg lower.
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In other words, BTC is not out of the woods yet, and prices could turn lower from around $104,000, extending the pullback. The immediate support is at $100,000, followed by $95,500. The latter is arrived at by subtracting the height of the H&S pattern from the breakdown point.
On the higher side, a move above $107,000 is needed to invalidate the bearish setup and shift focus to record highs.
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💡 Stay updated with the latest cryptocurrency news and insights by following our website! 🔔 Bookmark this site to get first-hand blockchain and digital currency news!
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💡 Stay updated with the latest cryptocurrency news and insights by following our website! 🔔 Bookmark this site to get first-hand blockchain and digital currency news!
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