in

Bitcoin Is At A Critical Juncture

Bitcoin Is At A Critical Juncture


After peaking at $63,503 on April 13 this year bitcoin has fallen just over 50% to approximately $30,700 today. It is still up 6% for the year but has been in a steady downward trend since it tried to rally in the late April to mid-May timeframe and failed to make a new high. There are two technical patterns that show bitcoin is at a critical juncture.

Head and shoulders

StockCharts.com describes a head and shoulders pattern as, “the Head and Shoulders reversal pattern is made up of a left shoulder, a head, a right shoulder, and a neckline.” It adds, “A Head and Shoulders reversal pattern forms after an uptrend, and its completion marks a trend reversal. The pattern contains three successive peaks, with the middle peak (head) being the highest and the two outside peaks (shoulders) being low and roughly equal. The reaction lows of each peak can be connected to form support, or a neckline.”

As can be seen in bitcoin’s chart there was a heads and shoulders pattern formed between March and May this year. And then it decisively broke below the neckline support at $50,000.

Descending triangle

The near-term technical bearish pattern that has formed is a descending triangle. StockCharts.com describes it as, “a bearish formation that usually forms during a downtrend as a continuation pattern. There are instances when descending triangles form as reversal patterns at the end of an uptrend, but they are typically continuation patterns. Regardless of where they form, descending triangles are bearish patterns that indicate distribution (or selling of shares).”

After an attempted rally in late June bitcoin has seen a series of lower highs with the base of the triangle right around where it is currently trading. If the pattern holds, which is by no means a certainty, and bitcoin breaks below the base of the triangle, there is some longer term support around $30,000 but it could easily fall below this level.



Source link

What do you think?

Expert

Written by Bitcoin

Content Author

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Tim Dillon Baffled By Millions Poured Into Hit Podcasts Like Call Her Daddy

Schneider National to open innovation center in Ashwaubenon with artificial intelligence