Bitcoin: head and shoulders pattern could trigger a decline
Bitcoin may have formed a head and shoulders pattern on the charts.
Short and medium term forecasts remain bearish.
Support and Resistance are located at $ 5700 and $ 6900, respectively.
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Over the past three days, Bitcoin has traded in the $ 6,500- $ 6,900 range with several unsuccessful attempts at its bullish breakout. A short-term bearish pattern may have formed on the charts.
Ascending support line
During the movement in tandem with this support line, the price reached a maximum three times around $ 6900. However, each time the RSI maximum turned out to be lower and lower. This is a signal of a bearish divergence and often precedes a decline in price. Finally, the bearish divergence trend line remains unbroken for now.
In addition, the candles that formed on the chart on the way to $ 6900 had long upper wicks, which is also considered a bearish sign and supports the likely price decline..
In the event of a bearish breakout, the nearest support area will meet the pair around $ 5700.
On the shortest timeframes, Bitcoin has formed a kind of head-and-shoulders pattern. If this assumption is correct, then we can say that the price is in the process of forming the right shoulder, and the neckline of this model passes at $ 6550.
This pattern is also bearish, confirming our forecasts that the BTC rate may fall further.
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In addition, the last two bullish candlesticks are significantly inferior in size to the previous bearish candlesticks. This gives us reason to assume that we are seeing only a correction, and not the beginning of a new phase of growth..
Thus, BTC made several unsuccessful attempts to make a bullish breakout of the $ 6,900 resistance level. The price has formed a bearish pattern on the short-term chart and we expect a bearish breakout.
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