This valid head and shoulders pattern could devastate Bitcoin price

All of Bitcoin's efforts to cross the $ 7,000 region have been pouring into the sea as it loses momentum and whirling below the established support at $ 6,800 in a sharp decline overnight.

The price action has recently formed a clear head and shoulders pattern - a signal that cryptocurrencies could experience some serious losses in the coming days and weeks.

Bitcoin risks losing it all momentum increase after severe overnight decline

Currently, Bitcoin is up 2.42% at $ 6,900, which is the point where the cryptocurrency traded before going up rapidly.

The positive performance last week pushed prices to a high of over $ 7,200, before being rejected again in the same area.

As such, Bitcoin has been rejected three times at the lows of the $ 7,000 area over the past few weeks and the instability here is a very bearish sign that indicates the medium-term peak.

This latest downside move also makes BTC reach an important level for the medium-term market structure, as failing to hold above $ 6,500 could invalidate all subtle price increases and cause It returns to the lower level.

Flood analyst also mentioned the importance of this level in a recent tweet and he still raises the price as long as BTC trades on it.

“I hate planning multi-option deals but maybe something will happen in the next few days. I remain biased cows unless it collapses below 6.5k. Then it was pretty obvious disabled. "

This technical model may spark for another surrender move?

Although Flood is on the bulls side, it must be remembered that BTC was repeatedly rejected in the low region of the $ 7,000 region that formed a head and shoulders pattern (H&S).

Analyst and trader Mohit Sorout points to the sharp iron pattern on the chart and notes that H&S is the most reliable classic chart.

"H&S valid on BTC. Contrary to what everyone can believe in here, H&S is one of paradigm The most reliable classic, especially on higher time frames.

Unless the bull sustains a noticeable upswing in the coming days and hours, it is likely that Bitcoin will plummet due to a weak market structure.

The bottom can still happen

The world economy has been thoroughly destroyed by the Corona virus pandemic, making investors lose confidence. Many people think that this is the "perfect storm" for Bitcoin. Because it often proves itself to be a viable option in the context of global instability. The cryptocurrency market tends to pump based on global geopolitical factors such as trade wars or tensions in the Middle East. But this time was completely different.

"Since the 2008-2009 recession ended, the US economy has created 22 million jobs, but lost 25 million jobs in just the past 4 weeks ... A decade of building a job market takes only 4 weeks to destroy everything. ”.

Additionally, the correlation between Bitcoin and the stock market has reached an all-time high. This cancels (at least temporarily) the idea that BTC has reached a safe-haven status.

The correlation index continues to increase is not a good sign for the crypto market because many analysts predict that the bottom of the stock market has not yet appeared and investors should prepare for big collisions. When this happens, it is certain that the cryptocurrency will not go up, at least in the short term as investors seek liquidity.

Range CME can activate move correction

In addition to the global macro factors that seem bleak for all markets, Bitcoin price has a CME gap of $ 3,500 and since BTC often fills it, it is likely that the dominant cryptocurrency will retest the region. $ 3,000.

A single CME gap is not sufficient to trigger price adjustment. But with the expected situation so grim in the near future when many people die and become unemployed globally, the bottom of the cryptocurrency may not appear yet.

You can see the price of BTC here.

Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Thuy Trang

According to AZCoin News

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