As a seasoned researcher with years of experience in the volatile world of cryptocurrencies, I have seen my fair share of market patterns and trends. The head-and-shoulders pattern on Bitcoin‘s daily chart is a concerning development that has been a reliable predictor of downtrends in the past. However, as we all know too well in this industry, nothing is set in stone until the candles close.
The recent rally to $96,250 was a promising sign, but it’s clear that sellers and margin shorts are still in control. The price action of the past week has been reminiscent of a game of tug-of-war, with intra-day rallies being capped by sellers, and bids at key support levels being absorbed.
The crucial level to watch is $94,000, as suggested by Aksel Kibar. If BTC can hold this level and break out above the 100K mark, it could negate the head-and-shoulders pattern. But until then, we are in a waiting game, much like a cat waiting for a mouse to show up in a trap – only instead of a mouse, it’s BTC price action and instead of a trap, it’s our analysis and predictions.
As Skew rightly pointed out, Bitcoin is currently stuck in a void between liquidity, much like a fish caught between two nets. We need to keep an eye on bid and ask liquidity over the coming days to see if any imbalances arise.
In the end, as they say in the crypto world, “Don’t catch the falling knife” – but also remember that sometimes, it’s the fallen knives that make the best souvenirs! Let’s hope this is just a temporary lull before another bull run.
As someone who has been closely monitoring the cryptocurrency market for several years now, I can tell you that the recent dip in Bitcoin’s price to $91,500 on Dec. 30 was a cause for concern for many investors, myself included. However, it seems that the so-called “Bitcoin bulls” have made a determined effort to prevent BTC from closing the year below the neckline of an ominous head-and-shoulders pattern on the daily timeframe.
I’ve seen similar patterns in the past and know from experience that a confirmation of this pattern can hint at a potential downside target in the $80,000 to $76,000 range. While it’s always difficult to predict the exact movements of the market, I believe that it’s important for investors to be aware of these potential risks and take appropriate measures to protect their investments.
I would recommend keeping a close eye on BTC’s price action in the coming days and weeks, and considering taking profits or hedging your position if necessary. As always, it’s crucial to do your own research and make informed decisions based on your own risk tolerance and investment goals.
Several experts emphasize that maintaining the price around $94,000 is crucial for Bitcoin to continue trading within its current fluctuation of $92,000 to $100,000. The surge during the day on Dec. 31 up to $96,250 demonstrates this effort to hold that level.
According to chartered market technician Aksel Kibar,
“100K is the pattern negation level. H&S failure will be confirmed with a breakout above 100K.”
Regardless of Bitcoin’s price reaching $96,250, it appears that sellers and margin traders are currently controlling the market direction. Information from TRDR.io indicates that there is a significant amount of spot selling on various exchanges, and the price surge today seems to have been primarily fueled by futures trading.
Over the past week, daily surges towards the upper limit of the trading range have been restricted by sellers. Meanwhile, buyers have been taking up positions at crucial support levels, but today’s increased buying activity in the continuous futures market hints that investors are also buying Bitcoin at its current lower price points ($91,000 to $93,000).
According to well-known cryptocurrency trader Skew, Bitcoin’s price appears to be caught in a state of limbo between current liquidity levels as we approach the new year, and advised traders to closely monitor bid and ask liquidity for any potential imbalances that might develop over the next few days.
The current BTC Binance Spot price seems to be trapped within a range as we approach the new year, with its movement heavily influenced by recent taker flow. It’s essential to keep an eye on this trend. The bid liquidity currently stands between $91,000 and $85,000, while the ask liquidity is around $98,000 to $100,000.
— Skew Δ (@52kskew) December 31, 2024
In terms of Bitcoin’s head-and-shoulders pattern, the best possible outcome would be for BTC to maintain its position above $94,000 and $94,500 in a daily closing price. Following this, traders might aim to reach the next level of sell orders at approximately $98,800.
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2025-01-01 00:03