We seek to understand the likely future direction of BTC and pinpoint significant support and resistance levels by analyzing a variety of price patterns.
Please take notice that while patterns might offer useful information, they cannot predict how prices will go in the future.
Bitcoin’s Recent Performance:
Bitcoin started a downward spiral after reaching a high of $69,000 on November 10, 2021, and had a notable fall of 77.57% during the next 12 months. The monthly fractal support, which has been in place since November 21, 2022, was finally formed at $15,479.
Subdued Performance and Recovery:
Since then, Bitcoin has performed more subduedly than expected, given the euphoria surrounding the last bull market. However, it has seen an interesting 100% rebound from the formation of the fractal support at $15,779. On April 14 of this year, the weekly fractal resistance at $31,035 was formed.
Identifying Price Patterns:
Trading financial markets require the ability to recognize different price patterns that evolve over time.
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In the case of Bitcoin, a distinct pattern has emerged: a head and shoulders pattern, with the pattern’s support level being endangered at the $27,000 level. If this reversal pattern triggers, Bitcoin may fall back to $23,355, signifying a 50% drop between the monthly fractal support and the weekly fractal resistance (- 9.4% below the recent support forged at $25,800). This might put the cryptocurrency back on an ascending trendline that has maintained past lows.
The Uncertainty and Importance of Previous Resistance:
It is vital to note the prior fractal resistance established at $26,851. A break over the previous resistance zone may encourage not only a retest of previous highs but also continued upward momentum and the formation of new highs. We have the monthly fractal resistance set at $48,235.
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