Bitcoin, the largest cryptocurrency by market capitalization, has shown significant weakness in today’s trading session after failing to continue on its instant price rally following yesterday’s release of the April CPI report at 4.9%.
So far, the trading week has been negative for the alpha cryptocurrency as it is seen to decline further on its sixth consecutive bearish candle on the daily timeframe.
In addition, the legendary crypto trader, Peter Brandt, has raised concerns and a sound warning about a potential bearish chart pattern formation which the alpha cryptocurrency is seen to complete on the daily timeframe.
Will Bitcoin Bulls Yield To This Potential Bearish Chart Pattern Formation
Earlier today, the legendary prop trader, Peter Brandt, identified a potential head and shoulders chart pattern forming for Bitcoin on the daily time frame.
Related Reading: Bitcoin Rebounds From $27,100 After Spike In Bearish Sentiment
Peter Brandt had sounded a warning in a tweet on Thursday morning urging BTC traders and investors to pay serious heed and attention to this bearish chart pattern if it forms successfully.
A head and shoulders should be taken seriously if it is completed $BTC pic.twitter.com/n5ZiLasmUC
— Peter Brandt (@PeterLBrandt) May 11, 2023
A head and shoulders pattern in technical analysis is a chart pattern formation of a digital asset that predicts a potential price reversal in market trends. A typical head and shoulders pattern could be seen on a price chart as a baseline with three peaks, where the highest peak (Head) is in the middle of two shoulders with lower peaks of almost the same heights.
On establishing this definition, the head and shoulder pattern which is potentially forming for Bitcoin on the daily time frame indicates a bearish reversal of the asset as the second shoulder is seen to potentially form on the daily timeframe. If and when it forms successfully could mean a massive and continued decline in the price of the alpha cryptocurrency.
The key areas surrounding the second shoulder formation are decisive levels for bulls and bears to gear into action. So unless Bitcoin bulls swing into action and save price, a successful formation of the second shoulder could occur, sending sell signal opportunities to crypto traders.
BTC Price Analysis On The Daily Timeframe
At the time of writing, data reports from Coinmarketcap show BTC trading at $27,381, which is a 3% drop in price in the last 24 hours. The market capitalization of the alpha cryptocurrency is also experiencing a 2.91% decline.
However, the April Consumer Price Index (CPI) report, released yesterday, brought renewed hopes and positive sentiments back to the crypto markets as it stood at 4.9% lower than the expected 5.0%.
Related Reading: Ripple CEO Rebuts WeBlogs Founder’s Claims That XRP Is A Security
Bitcoin rallied on the news, reaching a peak of $28,305 before it retraced in price. Although, positive market sentiments stemming from BTC’s reaction to the CPI report were shortlived as the alpha cryptocurrency dumped massively in price due to market liquidity concerns.
On the daily timeframe, BTC price is seen to trade slightly above the $27,100 crucial support which must hold for the price to move to the upside. If and when Bitcoin picks up momentum, bulls will be faced with an immediate resistance at $27,800.
Bitcoin price forms a potential head and shoulder pattern on the daily timeframe | Source: BTCUSD on TradingView.com