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With Bitcoin price failing to hold key support at $28,000 once again after Wednesday’s uptick, bears have taken advantage to push prices below $27k. BTC is trading near $26,830 as bulls look to return to the $27k level.
The technical outlook for BTC suggests bulls risk giving up more ground to determined bears if a head and shoulders pattern forming on the daily chart is confirmed. In a tweet earlier today as BTC struggled for upside momentum, Peter Brandt shared a chart of Bitcoin price showing the H&S pattern on the daily timeframe. He noted:
“A head and shoulders should be taken seriously if it is completed $BTC.”
A head and shoulders should be taken seriously if it is completed $BTC pic.twitter.com/n5ZiLasmUC
— Peter Brandt (@PeterLBrandt) May 11, 2023
What next for BTC if the price dips further?
In technical analysis, a head and shoulders pattern is taken to signal a trend reversal. In this case, a bullish-to-bearish reversal that suggests the coin’s upward trend is fizzling. With a local top in place, this trend reversal pattern historically signals further declines.
At the time, Bitcoin traded around $27,549, which puts current prices below the pattern’s neckline.
Crypto analyst Altcoin Sherpa says the downside could be much deeper, and shared a chart showing the potential retreat to the psychological support zone at $20,000.
$BTC: 1 thing to note here guys is that when the floor gives out for this type of price action, we see violent ass moves. It's not just a small break of resistance, it's usually a cascade of liquidations and -20%+ candles. Wouldn't be surprised to see it go deeper than you think pic.twitter.com/mpZzeq2aaX
— Altcoin Sherpa (@AltcoinSherpa) May 11, 2023
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