Bitcoin forms a head-and-shoulders pattern, signaling a possible drop toward $96K.
Price retests neckline as traders brace for fresh selling pressure below $100K.
RSI holds around 50, keeping both bounce and breakdown scenarios in play.
The price of Bitcoin is dancing on the edge of a knife. A looming head-and-shoulders pattern signals potential trouble. Traders watch closely as BTC clings to the neckline. One false move could spark a sharp drop toward $96,000. Meanwhile, RSI hovers near 50, adding another layer of suspense. Will this level trigger a bounce, or will selling pressure overwhelm buyers? The market waits with bated breath. Let’s unpack the current setup and what may unfold next.
https://twitter.com/Washigorira/status/1930557667136725431 Price Action Hints at More Pain Ahead
Bitcoin’s broader trend remains constructive, but the short-term picture looks grim. The price recovered to nearly $104,000 after dipping to $104.30 overnight. This bounce aligned with gains in U.S. equity futures. On the surface, buyers seem to fight back. Yet, the hourly chart tells a different story.The bounce appears to be a textbook breakdown and retest. BTC plunged from a head-and-shoulders formation on Thursday. This pattern often signals a shift from bullish to bearish momentum. Prices now revisit the neckline, a key resistance zone.
Behavioral patterns support this retest. Early short sellers often take profits as prices revisit the neckline. This creates a temporary bounce. However, new sellers usually pile in at this level, aiming for the next leg lower. If history repeats, Bitcoin faces another wave of selling soon. This behavior follows what behavioral analysts call prospect theory. Traders who missed the initial breakdown feel compelled to act. As the price returns to the neckline, they enter fresh short positions, reinforcing the downward trend.
RSI Adds a Twist to the Bearish Picture
Immediate support lies at $100,000. A break below that level opens the door to $95,500. This target comes from subtracting the pattern’s height from the neckline. If selling accelerates, $96,000 could act as a psychological magnet for bears. While the technical pattern leans bearish, the RSI offers a subtle twist. The indicator currently holds around 50, a zone known for sparking price reactions. Traders often view this level as neutral ground.
An RSI bounce could inspire short-term buyers to defend $100,000 support. However, a drop below 50 may embolden bears. If momentum shifts lower, expect volatility to rise. The neckline remains the battleground, with bulls and bears fighting for control. Adding to the complexity, market sentiment remains fragile. Macro factors and equity markets continue to influence crypto movements.
A shift in these external forces could amplify the technical setup already in play. Overall, Bitcoin’s fate hangs in the balance. The head-and-shoulders formation suggests more downside risk. The RSI keeps hope alive but offers no guarantees. Traders should prepare for heightened volatility in the coming days. A clear break of $100,000 would likely confirm the bearish scenario. Stay alert.
