In today’s technical breakdown, let’s focus on Bitcoin, which is currently undergoing a correction phase after printing new all-time highs above $111,000. The recent price action suggests that the bullish momentum is weakening, and we might be facing a deeper pullback if key support levels break.
Firstly, the blue uptrend line, which had guided Bitcoin’s impressive climb, was broken last week, triggering the initial wave of caution. Since then, Bitcoin has started to form a head and shoulders pattern, which is typically a bearish reversal setup. The left shoulder, head, and developing right shoulder are marked with green annotations, showing a clear structure in the making.
The key to this pattern lies in the black neckline, which currently serves as the last major support before a full bearish confirmation. A daily candle closing below this neckline would activate a strong sell signal, paving the way for a deeper correction in the mid-term.
As long as Bitcoin remains above the neckline, sentiment stays neutral, and caution is advised. Traders should adopt a wait-and-see approach, with eyes locked on the neckline for any confirmed break.