Bitcoin Price Key Highlights
- Bitcoin price is still stalling on its potential reversal as it tests another area of interest.
- A new reversal pattern that could turn out to be an inverse head and shoulders appears to be forming.
- In that case, bitcoin price might form a shoulder by dipping back to $6,000 before attempting to break the neckline.
Bitcoin price appears to be creating an inverse head and shoulders reversal pattern on its 4-hour time frame.
Technical Indicators Signals
The 100 SMA is still below the longer-term 200 SMA to suggest that the path of least resistance is to the downside. This means that the downtrend is still more likely to resume than to reverse.
Bitcoin price broke past the 100 SMA dynamic inflection point to reflect a bit of bullish momentum but is still hitting resistance at the 200 SMA dynamic inflection point. If this continues to hold, price could fall back to the lows at $5,800 or the near-term area of interest at $6,200.
If the $6,000 to $6,200 area is able to keep losses at bay, bitcoin price could complete the right shoulder of its inverse head and shoulders pattern. Price could then attempt a break past the neckline at $6,800 to confirm the uptrend.
The chart pattern is approximately $1,000 tall so the resulting rally could be of the same height. For now, though, RSI is moving south so bitcoin price might follow suit while sellers have the upper hand. Stochastic also has room to fall before hitting oversold levels and signaling a return in buying pressure.
Market Factors
Bitcoin price is on track to finish the week on a strongly positive note after a running start this week, month, and quarter. If it’s able to pull this off until the following week, bullish pressure could keep building up as investors return to the market.
So far, there have been no negative reports concerning the industry, although the Supreme Court decision in India led to a slight dip.
