After dropping to $91,500 on Dec. 30, Bitcoin bulls made a concerted effort to prevent BTC (BTC) price from closing the year below the neckline of an ominous head-and-shoulders pattern on the daily timeframe. As discussed by Cointelegraph in greater depth in a Dec. 30 article, a confirmation of the head-and-shoulders pattern hints at a downside target in the $80,000 to $76,000 range.
BTC/USD (spot) Coinbase. Source: TradingView.com
Multiple analysts have cited the importance of holding the $94,000 level to keep BTC trading in its current $92,000 to $100,000 range, and the Dec. 31 intra-day rally to $96,250 reflects this attempt.
According to chartered market technician Aksel Kibar,
“100K is the pattern negation level. H&S failure will be confirmed with a breakout above 100K.”
Despite the price run up to $96,250, sellers and margin shorts continue to have the upper hand on Bitcoin’s price action at the moment. Data from TRDR.io shows spot selling at most exchanges and the price breakout today was primarily futures driven.
Similar to the price action of the past week, intra-day rallies toward the range highs are capped by sellers, while bids at key support levels are absorbed, but today’s uptick in buy volumes in the perpetual futures market does suggest that margin longs are also opening at these dips to the lowest parts of Bitcoin’s price range ($91,000 to $93,000).
BTC/USDT Binance perps. Source: TRDR.io
Popular crypto trader Skew described Bitcoin price as being “stuck in a void between liquidity here going into a new year” and suggested that traders keep an eye on bid and ask liquidity to see if any imbalances arise over the coming days.
Regarding Bitcoin’s head-and-shoulders pattern, the most ideal scenario would involve BTC holding $94,000 to $94,500 into a daily close, followed by traders making a run at the next block of asks at $98,800.
BTC/USDT Binance perps. Source: TRDR.io
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
