Is bitcoin gearing up for a long-term reversal?
BTC/USD is already testing the neckline of the chart pattern, which means that we might be in for a big move pretty soon!
Check out this formation I’m watching on the daily time frame.
Bitcoin (BTC/USD) Daily Chart by TV
Bitcoin made a couple of failed attempts to bust through the ceiling near $32,500 recently, creating a double top pattern. Price is now down to the neckline at $25,500, and a break below support could confirm the reversal.
If that happens, BTC/USD could tumble by the same height as the chart formation. Technical indicators, however, are giving mixed signals.
Although the 100 SMA is above the 200 SMA to suggest that support is more likely to hold than to break, the gap between the moving averages has narrowed enough to hint at a potential bearish crossover.
Stochastic has been indicating oversold conditions for quite some time, though, so heading north could mean that a return in bullish pressure is in the works.
In that case, bitcoin might still bounce off current levels to make another test of the highs or even make another attempt to break higher.
Still, it’s worth noting that price is moving below both SMAs, so these could also hold as dynamic resistance levels just below the $30,000 psychological mark.
Dollar strength seems to have put bitcoin and other risk assets in a downward trajectory last week, and upcoming U.S. data could make or break this trend this time.
Don’t forget to keep tabs on headlines that could strongly impact overall market sentiment, too!
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