Remember the inverse head and shoulders that I pointed out yesterday on the 4-hour chart of bitcoin price? It’s no longer valid. The sharp sell-off in BTCUSD has push the cryptocurrency lower. In fact, it was even enough for bitcoin price to break support at the rising trendline from connecting the lows of June 15 and June 20.
When you enroll in our free forex trading course, you will learn that a break of a rising trendline is widely interpreted as a bearish indicator. If there are enough sellers in the market, we could soon see bitcoin price fall to its June 15 lows at $8,900.00.
The hourly time frame also supports this bearish assumption. BTCUSD has recently been consolidating after a sharp sell-off. Consequently, a bearish pennant chart pattern has formed. A close below yesterday’s low at $9,193.99 could trigger the bigger sell-off on the daily time frame.
Alternatively, you should be wary of a close above the recent consolidation around $9,334.19. It could invalidate the bearish pennant chart pattern and indicate that there is more upside potential. BTCUSD could then trade higher to resistance around the 100 SMA and 200 SMA at $9,466.70. If there are enough buyers in the market, bitcoin price could even retest last week’s highs around $9,700.00.