Bitcoin Bearish Pattern Weaves, Legendary Trader Sounds Warning
Bearish or bearish market trend in cryptocurrency or stocks. Background for trading, arrow down graph for decline in rates. Cryptocurrency price chart and blockchain technology. Global economic crash.
Bitcoin, the largest cryptocurrency by market capitalization, has shown significant weakness in today’s trade after failing to continue its immediate price rally following yesterday’s release of the April CPI report of 4.9%.
So far, the trading week has been negative for the alpha cryptocurrency as it looks set to drop further on its sixth consecutive bearish candlestick on the daily time frame.
Additionally, legendary crypto trader Peter Brandt has raised concerns and sounded a warning about a potential bearish chart pattern formation that the alpha cryptocurrency is seen completing on the daily time frame.
Will Bitcoin Bulls give in to this potential bearish chart pattern formation
Earlier today, legendary prop trader Peter Brandt identified a potential head and shoulders chart forming for Bitcoin on the daily time frame.
Related Reading: Bitcoin retreats from $27,100 after surge in bearish sentiment
Peter Brandt had warned in one chirping on Thursday morning and urges BTC traders and investors to take serious note and pay attention to this bearish chart pattern if it forms successfully.
A head and shoulders should be taken seriously if completed $BTC pic.twitter.com/n5ZiLasmUC
— Peter Brandt (@PeterLBrandt) 11 May 2023
A head and shoulders pattern in technical analysis is a chart pattern formation of a digital asset that predicts a potential price reversal in market trends. A typical head and shoulders pattern can be seen on a price chart as a baseline with three peaks, where the highest peak (Head) is midway between two shoulders with lower peaks of almost the same height.
Establishing this definition, the head and shoulder pattern potentially forming for Bitcoin on the daily time frame indicates a bearish reversal of the asset as the second shoulder could potentially form on the daily time frame. If and when it forms successfully, it could mean a massive and continued decline in the price of the alpha cryptocurrency.
The key areas around the second shoulder formation are crucial levels for bulls and bears to initiate. So unless Bitcoin bulls step in and save the price, a successful formation of the second shoulder could happen, sending sell signal opportunities to crypto traders.
BTC Price Analysis on the Daily Time Frame
At the time of writing, data reports from Coinmarketcap show BTC trading at $27,381, which is a 3% price drop in the last 24 hours. The market value of the alpha cryptocurrency is also experiencing a decrease of 2.91%.
The consumer price index for April (CPI) reportreleased yesterday, brought renewed hopes and positive sentiment back to the crypto markets as it was 4.9% lower than the expected 5.0%.
Related reading: Ripple CEO debunks WeBlogs founder’s claims that XRP is a security
Bitcoin rallied on the news, hitting a high of $28,305 before retreating in price. Although positive market sentiment stemming from BTC’s reaction to the CPI report was short-lived as the alpha cryptocurrency massively dumped in price due to market liquidity concerns.
On the daily time frame, the BTC price is seen trading slightly above the crucial $27,100 support that needs to hold for the price to move higher. If and when Bitcoin takes off, bulls will be met with immediate resistance at $27,800.
Bitcoin price forms a potential head and shoulder pattern on the daily timeframe | Source: BTCUSD on TradingView.com
Featured image from Istock, chart from TradingView.com
