Bitcoin price is up by 12.90% so far for this week after rallied through the charts on Wednesday as investors anticipate its halving event in May. As of this writing, BTCUSD is up by almost 1.00% as it trades at $8,700.37. However, a closer look at the recent price action of the cryptocurrency suggests that its bullish run could soon run out of steam.
On the daily time frame, it can be seen that bitcoin price is trading around resistance at the falling trend line (from connecting the highs of June 25 and February 20). Yesterday’s candlestick also closed as a shooting star which is considered by many as a reversal confirmation signal.
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Meanwhile, a closer look at the 1-hour time frame reveals that BTCUSD has been making lower highs after a series of higher highs. Consequently, a head and shoulders pattern has formed. This is considered as a bearish reversal indicator and a close below the neckline support at $8,557.60 could trigger a sell-off to $8,200.00 where the 100 SMA is.
On the other hand, be wary of a break above the second shoulder at $8,951.38. This could invalidate the head and shoulders pattern and indicate a potential rally to recent highs at $9,448.57. If resistance at that price level does not hold, the next ceiling could be at $10,360.00 where BTCUSD topped on February 13.
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