Bitcoin (BTC) price The rise to $44,000 this week was a very important ‘breathing’ area, but on the daily chart the situation was much more bleak. A ‘head and shoulders pattern’ collapse has largely started to appear and the ‘death cross’ chart seen on the price chart has created a lot of tension.
Heading into a new week, the bulls need to hold the $40,000 area very strongly to prevent the bears from completely taking over the market.
January 16, 2022 Bitcoin Daily Price Chart
A detailed analysis of the Bitcoin daily chart revealed an active ‘head and shoulders pattern’, which also stands out as a setup that fails when the candles fall below the ‘neckline’.
in bitcoin price The ‘mini rally’ was rejected at the daily 20-SMA (shown in red) and bearish pressure could be applied at the $40,000 levels as on-chain metrics also remain ‘frozen’.
Unfortunately, a close below BTC’s $40,000 neckline would have a serious impact on the market. If there is no early pushback near the $37,500 levels, the price could slide as low as the $30,000 and $29,400 demand zone. The death toll between 20-SMA (red) and 200-SMA (green) will add more fuel to the fire by highlighting losses.
However, a close above $45,000 and a daily 20-SMA (red) setup will invalidate it. If the gains rise above $47,000, the bulls will have an edge at BTC’s 200-SMA (green). Once BTC strengthens above its right shoulder at $52,000, it will make more sense to analyze and forecast the uptrend.
Indicators
Bitcoin’s current $40,000 support line has also been strengthened by a buy signal on the MACD, and an issue was not near. The same is supported by the successive green bars on the Awesome Oscillator.
However, buying pressure will be limited until each of these metrics rebounds above their respective mid-zones. On the other hand, the daily RSI remained below 40, ignoring the optimistic sentiments from the MACD and Awesome Oscillator.
As a result
A ‘head and shoulders pattern’, Bitcoin could face massive selling pressure if its price drops below the neckline ($40,000). Losses can be felt up to $30,000 as a result of the extreme fall. To reject the pattern, BTC must close above $45,000 and its 20-SMA (red).
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.