Recently, the continued decline in Bitcoin prices has drawn attention to technical formations in the market, particularly the bearish head and shoulders structure gradually forming on the daily chart. This pattern is widely seen as a potential bearish signal, especially against the backdrop of prevailing bearish sentiment in the current market.
Analysis of the head and shoulders pattern:
The current neck line position is $92,000, which is a crucial support level.
If Bitcoin's closing price remains below this level for several consecutive days, the technical analysis target price will point to $79,500.
Some more aggressive analysts, such as Aksel Kibar, even believe that the extension of this pattern could push prices below $80,000.
Downward range forecast:
In the short term, if short sellers continue to dominate the market, Bitcoin may test the recent support level at $91,500.
Once this support is broken, it may further drop towards $76,000, which is viewed as a deeper technical retracement point.
Increased short-selling pressure:
According to trader Skew's observations, the spot market is dominated by sell orders, and the perpetual contract market tends to favor short positions. This indicates that the overall market expectation for prices still has room to decline.Resistance to buying rebounds:
Whenever Bitcoin attempts to rebound near intraday highs (such as the $94,000–$96,000 range), it encounters significant selling pressure.
The recent rebound lacks sufficient momentum, further consolidating the market advantage for short sellers.Key support and resistance levels:
Downward key point: If the price falls below $92,000 and closes below this level for several consecutive days, it may trigger a larger-scale sell-off.
Upward key point: Holding above $95,000 may curb the negative effects of the head and shoulders pattern, while restoring market confidence in the mid-term price range.
Key factors for short-term price trends
The macro impact as Trump's inauguration date approaches:
The Bitcoin market is often influenced by macroeconomic events, and Trump's upcoming inauguration as the new president may bring policy uncertainties, leading to price fluctuations.Market bullish and bearish sentiment:
If short sellers continue to increase their positions, the market may face a new round of rapid decline.
However, if Bitcoin can garner strong buying support at critical support levels (such as $92,000) in the near term, it may trigger short covering, increasing the probability of a price rebound in the short term.
Institutional movements:
Recent increases or liquidations by large institutions and enterprises will further influence market trends, as actions by Tether and MicroStrategy often change market expectations.
Focus on the battle for $95,000
Whether Bitcoin will drop to $76,000 depends on multiple factors, but based on the current technical formation and market sentiment, the short-term trend still leans towards bearishness. If it can firmly hold above the upward key position of $95,000, it may avoid confirmation of the pattern and reopen the potential for a rebound. Otherwise, the possibility of dropping towards $79,500 or lower levels cannot be ignored.
Do you think the market will continue to decline sharply, or will it reverse at key support levels? Feel free to share your views!
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