As the price of Bitcoin (BTC) continues to the pullback phase, sellers are eyeing the $98,664 level as bullish momentum fades.
This week, the crypto market has experienced increased volatility following Donald Trump’s inauguration on Monday. This surge briefly propelled Bitcoin to a new all-time high of $109,111 before quickly reversing.
During the ongoing pullback, Bitcoin has dropped from the $109k resistance zone to below $102k, marking a loss of nearly 5%. Will the pullback restore the exhausted bullish momentum, or is this the start of another correction for the crypto market?
Bitcoin Price Analysis
Since mid-December, Bitcoin has struggled to maintain levels above the $108k resistance, leading to a sideways trend. The long-wick rejection candles in the $108k-$109k range suggest that sellers are actively defending these levels and maintaining control.
On the 4-hour chart, the latest Bitcoin reversal has formed a classic head-and-shoulders pattern, which is a bearish formation. This pattern is characterized by three peaks, with the middle extending higher than the two nearly equal-length peaks.
If the pattern holds, Bitcoin’s price could drop by approximately 1.5% to test the 100-day EMA line.
Technical indicators are showing increasing seller dominance. A fresh downturn in the 20-day EMA highlights the growing bearish sentiment. Likewise, the Relative Strength Index (RSI) breaking below the midline signals growing selling pressure.
Bitcoin Price Targets
A bearish breakdown below the 100-day EMA, in line with the Head and Shoulders pattern, could accelerate the downward momentum for Bitcoin. Theoretically, the post-breakdown decline could match the distance from the head to the neckline, which, if true, would bring Bitcoin’s price down by 3.40% to the $98,664 support.
On the other hand, a rebound could see Bitcoin challenge the $103,625 level again. At press time, Bitcoin is struggling to maintain above the $101K price level.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
