This is a daily technical analysis by Coindesk analyst and chartered market engineer Omkar Godbole.
Bitcoin
BTC$103,882.59
Technical analysis shows that the broader outlook is constructive, but its short-term outlook remains bleak.
Major cryptocurrencies by market value have returned from nearly $104.30 to nearly $104,000 from its one-night low, in addition to positive behaviours on US stock futures.
However, a closer look at the hourly price chart reveals that bounce is likely a classic breakdown and retest play. Cryptocurrency jumped out of the head and shoulder pattern on Thursday, showing a shift in trends born out of short-term bullishness, and prices are now revisiting a breakdown point called the neck line.
This is because early sellers – those who short-circuited during the breakdown can benefit in line with the outlook theory of behavioral analysis.
It usually leads to a bounce that normally runs to fresh sales at the neckline from people who missed the first breakdown. These fresh shorts will have lower next legs.
In other words, BTC has not yet been out of the forest, so the price could go down from around $104,000, which could result in an extension of the pullback. Immediate support is $100,000, followed by $95,500. The latter is reached by subtracting the height of the H&S pattern from the breakdown point.
BTC hourly price chart. (tradingView/coindesk)
Highs require a move above $107,000 to disable the bearish setup and shift the focus to a record high.
