According to an analyst who likens the bearish outlook of Bitcoin to a classic head and shoulders model, the price of Bitcoin could drop below the 2017 record high of $ 20,000.
Earlier Wednesday, BTC formed four of the five key components that validated that reversal indicator. There were three hill views, the middle of which was larger than the others and supported by the so-called neckline. The analyst warned in the following words:
“IF WE WILL FALL BELOW 30,000 DOLLARS, THE PREVIOUS [NECK LINE] SUPPORT WILL TURN RESISTANCE […] WE CAN REACH THE PRICE TARGET OF THE HEAD SHOULDER MODEL, THAT CAN DRAW THE PRICE BELOW THE LEVEL OF 20,000 USD”
The statements came after Bitcoin’s last withdrawal from over $ 36,000 in transaction space. As investors evaluated their profit taking scenarios, the price dropped to $ 32,309 on the Coinbase exchange. This was also seen in Bitcoin’s on-chain data. Ki-Young Ju, CEO of blockchain analytics firm CryptoQuant, confirmed that the recent BTC fix coincided with the miners abandoning their assets. Besides that, exchanges have witnessed less stablecoin deposits. Also, the flow of Bitcoin to non-exchange wallets has slowed during this week. “We can do a second dump,” Ju said just before BTC dropped to $ 32,000.
Mainstream traders and analysts agree that a significant price change is unlikely to occur from a shorter-term Head and Shoulder pattern (one day to three weeks). “The head and shoulders model can evolve in almost any time frame,” said analysts at Schwab, “However, most traders believe that patterns that take longer to form are more important and are more likely to detect a meaningful price reversal.” used the expressions.
Volume is also likely to be an important factor in determining the current Head and Shoulder model of Bitcoin. A break below the neck support with an increase in transactions could justify the negative target $ 20,000. On the other hand, insufficient volumes in any negative breakout will mean a recovery towards $ 35,000. Meanwhile, analyst Jonny Moe is seeing a bullish trend and points out that the Head and Shoulder pattern could be a Rising Channel indicator.
“WE HAVE TO INDICATE THAT WE ARE YET IN THE LOCAL DROP TENDENCY. I WANT TO SEE THIS FALL TREND IS BROKEN AND GAVE SOME MORE CONFIDENCE. “