Bitcoin’s potential Head and Shoulder pattern is still underway and it will reach a conclusion today, unless the price decides to go sideways again. The price of BTC has slowly trickled down from a high of $10,950 to a current price of $10,250, by forming lower highs.
Head & Shoulder
This pattern and many like it can only be considered a pattern when and if the price breaches the neckline. If not, the pattern is considered invalid. As seen above, this is a variation of an actual Head and Shoulder pattern.
There are two supports for Bitcoin in a lower timeframe, a decline to support that has been tested 4 times since the formation of the above-mentioned pattern and an almost horizontal support ranging from $10,200 to $10,300. The price is sitting at this latter support; breaching this would push the price of Bitcoin to $10,000 and $9900, which happens to be the neckline for the Head and Shoulder pattern.
If the price drops below the neckline, it would be a free fall for BTC prices to head as low as $9,300 and retest this support for the fifth time in over three months.
The short term targets, as mentioned above, include $10,000 and $9,900.
The medium-term targets can be seen clearly in the above chart with Fibonacci retracements, i.e. $9,700, $9,500, and $9,400 to $9,300.
Bitcoin’s dominance breached the 70-level in August 2019 and has managed to stay above it for quite a while now. However, BTC dominance seems to be trending in a parallel channel and has stuck within it for quite a while in the daily time frame.
Adam Back, CEO and Co-founder of Blockstream,