Bitcoin Price (BTCUSD) Sees Violent $750 Drop, Top Formation Appears

Tony "The Bull" Severino

1 year ago

2 mins read

bitcoin price head and shoulders ambulance

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Yesterday, crypto bulls began celebrating as Bitcoin poked its head above resistance at $12,000 momentarily, before pulling back ahead of the first daily close of the new month.

The failure to set a new high, coinciding with some bearish technical signals and underlying market factors, may have prompted the selloff. But how low will this correction go? Is this another opportunity to buy the dip, or is this a more extensive reversal?

Bitcoin Price Forms Head And Shoulders After Today’s 6% Correction, Targets Retest of $10,000

Bitcoin price has been on a slow and steady uptrend most of 2020. The only discrepancy was the Black Thursday collapse in mid-March that took down stocks, crypto, metals, and more.

All signs are pointing to the crypto asset’s next bull trend beginning, but key resistance levels remain. With $10,000 now a thing of the past, the primary resistance lies above $12,000, and above there, $13,800 where the June 2019 top took place.

After several attempts, Bitcoin may have made its last try to hold above $12,000 for some time, given the severity of today’s $750 drop and the formation of an ominous top pattern.

In addition to diving over 6% already from last night’s daily close, less than 12 hours later it has put the cryptocurrency at risk for confirming a head and shoulders pattern.

BTCUSD Head and Shoulders Top Formation Chart Pattern | Source: TradingView

Head and shoulders are a bearish reversal pattern often found at the top of a trend. These patterns are characterized by a left and right shoulder, with a peak or “head” in between. The pattern represents a tug of war scenario playing out between buyers and sellers, where ultimately, buyers lose.

The pattern confirming would take Bitcoin below the support level at $11,350 that’s currently holding, potentially causing a cascade of selling and stops being hit, pushing Bitcoin to a new local low.

As for how far that may go, $11,000 itself could act as support. However, the head and shoulders top target would send Bitcoin tumbling back down towards $10,250, which is where the previous high lies prior to the impulse up from consolidation.

Just as Bitcoin price required several attempts to break through $10,000 before it was able to hold, above $12,000 could require similar strength gathered after plenty of tries.

Resistance at $10,000 was a tough nut to crack, losing that support would be devastating for Bitcoin, and could put any early signs of a new bull market in serious jeopardy.

Will Bitcoin hold at $11,000, or $10,000 below it, and revisit $13,000 and higher? Or was this the top for 2020 and things are going to cool off in crypto for a while once again?

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

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In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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