After making its all-time high on Monday the Bitcoin price has lost trend and is making its way lower. Could this be the last chance to buy before a potential major rally that takes Bitcoin into new price territory?
A further fall for the Bitcoin price?
Source: TradingView
The 4-hour chart for the $BTC price shows how the price dipped below the short-term local uptrend and is now possibly making its way lower. The 0.236 Fibonacci, which is the most shallow of the Fibonacci retracements, has held the price up to now. However, there are signs that the price could start to make its way down to one of the lower Fibonacci levels.
Chief among these signs is bearish divergence. This is on the short-term time frame so it is not as reliable as for higher time frames, but it can be clearly seen that the price action was rising while the Stochastic RSI indicators and the RSI indicator were falling. This is likely to pull the price down lower if it plays out.
The question then is to which Fibonacci level could the price fall? For the price to stay at the 0.236 Fibonacci is probably not enough of a pullback, so the 0.382 Fibonacci would be a bear target at the very least. The 0.5 Fibonacci looks more likely as it has stronger support, although the 0.618 Fibonacci is the golden level and would be the healthiest retracement of them all.
Could the price get all the way back down to these levels given the very positive market sentiment for Bitcoin currently? Yes, it’s entirely possible, and it would also help the daily Stochastic RSI indicators to reset, which could eventually signal the strong upside price momentum that could take Bitcoin to a new high.
Bitcoin bullish pattern continues to develop
Source: TradingView
The daily chart for the $BTC price illustrates that an inverse head and shoulders pattern is still taking shape. It just remains for the price to come down further in order to form the right shoulder. If this takes place, the price would then have to return to the multi-year ascending trendline, break through and confirm above, for the pattern to be validated
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Author: Laurie Dunn
