Bitcoin Price (BTCUSD) – Head and Shoulders Hint At A Potential Drop to $8,800.00?

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Written By: Angeline Feliciano

Feb 26, 2020, 03:27 GMT 03:27

bitcoin BTC

Summary:

Bitcoin price formed a head and shoulders pattern on the daily time frame which could hint that BTCUSD may soon drop to $8,800.00.

Just like other higher-yielding assets, Bitcoin price has been trading lower against the US dollar these past few trading days. The daily chart of BTCUSD even reveals that the cryptocurrency has made lower highs after a series of higher highs and surging past the $10,000.00 psychological handle. Unfortunately for the bulls, the rally was not sustained. Instead, a head and shoulders chart pattern has materialized.

This chart pattern is considered as a bearish reversal signal in forex trading. BTCUSD has already broken support at the neckline which was around $9,689.00. This means that we could soon see the cryptocurrency trade lower. If there are enough sellers in the market, Bitcoin price could fall to near-term support which is around $8,800.00. This price coincides with the 200 SMA. Additionally, the psychological handle also aligns with the rising trend line when you connect the lows of December 17 and January 2.

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However, if there are still buyers in the market, we could see bitcoin price trade higher and test the neckline at $9,689.00 for resistance. A bullish close above $10,000.00 may even invalidate the head and shoulders chart pattern. It could indicate that Bitcoin price may soon make another run for $10,500.00.

Written By: Angeline Feliciano

Angeline Feliciano has been trading Forex for over ten years. She has invaluable experience working in FX education companies like BabyPips.com and Learn to Trade as a trader, currency analyst, trading coach, and presenter. Aside from these roles, she has also created intensive educational content on fundamental analysis which is heavily sought after by retail traders. She has taught hundreds of people how to trade the FX market in the Philippines and in Australia. When she is not trading, you can find her in the gym lifting weights.