Amid the bearish pressure that has hit the market, the price of Bitcoin around the $110.000 support level as selling pressure builds. This situation has led to predictions that the Bitcoin price will crash again amid this weakness. A notable analysis comes from crypto analyst Toby Dawson, who has shown the formation of a bearish 'head and shoulders' pattern, which could trigger a drop below $100.000.
In his analysis, shared on the TradingView website, Dawson explains the formation of the head-and-shoulders pattern. The left shoulder formed around $117.000 when the price was under pressure in September. This pullback then led to the formation of the head.
The subsequent rise in Bitcoin's price to a new all-time high above $126.000 resulted in resistance, establishing the head of the pattern. As expected, the price then continued its downward trend.
The right shoulder recently formed during the rally to $117.000 in late October. Once again, the Bitcoin price encountered significant resistance, marking the completion of the head-and-shoulders pattern.
With these formations, the crypto analyst points to the possibility of a significant increase in the Bitcoin price. However, if it breaks through, he expects the price to fall below $100.000, with a further decline towards $90.000.
Another crypto analyst has also pointed to the possibility of a Bitcoin price crash. This follows the recent peak above $126.000, and the analyst emphasizes that the digital asset typically experiences significant price drops after reaching new highs.
The focus now is on the one-week 50 EMA (Exponential Moving Average) and the support level at $100.000. These two levels serve as the last line of defense; if they fail, the analyst expects the Bitcoin price to plummet. The analyst warns investors to prepare for exits, stating: "Bitcoin is heading straight for the abyss!"
Like Dawson, this analyst also expects Bitcoin to fall below $100.000, but has an even pessimistic outlook. He expects it to fail above $90.000 and actually fall deeper into the $80.000 area before finding support.
What are the implications of the head and shoulders pattern for Bitcoin investors?
The head and shoulders pattern indicates a potential reversal point in Bitcoin's price, meaning investors may need to be prepared for a significant drop below $100.000, with the risk of further losses.
What can investors do in light of current market conditions?
Investors should consider reviewing their positions and preparing for potential exits, especially if the price falls below key support levels. Risk management and diversification remain crucial.
Is There Any Hope for a Bitcoin Price Recovery?
While there may even be optimism about a temporary rebound, current technical analysis and selling pressure strongly suggest the underlying trend remains bearish. Investors should therefore not be overly influenced by short-term milestones.