Bitcoin price has slumped more than 3.5% bringing the bearish Head and Shoulders pattern to near completion. Bitcoin dropped from roughly $254 to $243 which is in close proximity to the target of $241.50. With this loss, the cryptocurrency has erased all the gains for the month of April.
Each Bitcoin is currently worth $244.
An analysis of the 240-minute BTC/USD price chart reveals that the damage has been done and the price may consolidate or rebound in the coming sessions.
Head & Shoulders Pattern – Bitcoin had been forming a Head & Shoulders pattern – a technical bearish reversal pattern – which has almost matured. The neckline, which acts as the support, has been breached decisively with a surge in volume.
Bitcoin Price Chart Structure – The fall has brought the prices in the vicinity of the previous consolidation zone of $235-240. This base should act as a temporary support and restrict further losses.
Relative Strength Index – The RSI indicator value of 30.4305 is just inches away from entering the oversold territory, which begins below 30. More losses in Bitcoin price will push the reading in the aforementioned territory and may induce short covering.
Moving Average Convergence Divergence – The MACD indicator had been pointing to a fall even when the prices were consolidating sideways. As can be seen from the chart above, the MACD indicator (marked as the blue line below the price chart) was heading south, crossing the Signal Line (marked as the orange line) on the downside – this should have been viewed as a “red flag” to exit the cryptocurrency.
Bitcoin Price Analysis – Conclusory Note
With the bearish pattern almost complete and price near strong support zone, profit booking is advised for short traders. Long positions may be considered in Bitcoin for a target of $252 by placing a stop-loss (closing basis) below $240. Market participants must also stay connected with latest news and developments which may spring up price shocks.
Each Bitcoin is currently worth $244. Image: https://www.tradingview.com/x/1GxTTBWt/ An analysis of the 240-minute BTC /USD price chart reveals that the damage has been done and the […]