The $BTC price has just been confirmed below the neckline of a bearish head and shoulders pattern. Could the price now go down to $57,000? Or will the fakeout surprise traders?
Head and shoulders pattern confirmed.
Source: TradingView
In the short term, a head and shoulders pattern emerges. The pattern was fully developed and $BTC price broke through the neckline, rising again in the last few hours to touch the neckline, confirming the downtrend. If the pattern continues to make measured moves, the price could go as low as $57,000.
Of course, there are some issues with the bull trend line and horizontal support between here and the $57,000 downside target, but if the bears can gain some momentum with the help of the US stock market starting to decline, $57,000 could be a springboard for a move down to $50,000.
On the other hand, if stock markets rebound on news of successful talks between the US and Iran, Bitcoin could bounce back to its last highs, invalidating the head and shoulders pattern. It may resume a short-term upward trend.
So far there is no real momentum behind the collapse
Source: TradingView
The daily time frame shows a measured move down to $57,400 in a head and shoulders pattern. So far, there is no volume to suggest that sellers are supporting this move, but if $BTC price continues to fall, sellers may get in on the action.
You can see that $52K to $50K could be a target if there is a crash and the price moves down to test the bear market trend line.
The difference in strength has put the bear market in its final stretch.
Source: TradingView
Things are starting to take shape in the daytime slot. The biggest sign that this bear market has reached its final phase is the strength difference between price action and RSI. Given that this is a high period, this difference in strength is actually no joke.
Can accent differences be negated? Yes. That may be so. But the interesting thing for the bulls here is that although the price may fall further, this does not invalidate the difference. It is the RSI indicator that needs to come down and bring out the previous bottom. On paper, this may seem like a reasonable possibility, but not if you think the last low was as low as the June 2022 RSI low, the lowest on record.
If you look at the RSI during the last bear market, you can see that once the bottom was reached, the price fell sideways to the actual bottom, which was about 13% lower. Translating this to today’s situation, the price of BTC could fall to the already mentioned price of around $52,000.
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.