Bitcoin (BTC) $101,782.3has gained over 50 percent in value since November 2024. However, technical analysis points to a possible decline in price. The price chart of Bitcoin, which has the largest market share in the cryptocurrency market, currently offers an appearance resembling the “Head and Shoulders” (OBO) formation. This formation usually signals a significant trend change from uptrend to downtrend.
How Did Shoulder Head and Shoulder Formation Form?
Although Bitcoin pushed the 100 thousand dollar level in November, this attempt failed. At this point the first “shoulder” was formed. Then, the sharp decline from 108 thousand dollars to 92 thousand dollars in December formed the “head” region of the formation. Finally, with the price falling to 97 thousand dollars, the “right shoulder” emerged.
Analysts, price of bitcoinHe points out that is currently close to the “neckline” at the support level. The throat line is the horizontal trend line connecting the lows of both shoulders, and this support level for Bitcoin is currently located around $91,500.
If the price falls below this level, the formation is expected to be fully confirmed. According to the “measured move” method, which is a common method in technical analysis, the price may drop to 75 thousand dollars. This method calculates the distance between the highest points of the head and the throat line and adds this distance below the support level.
Investors Should Be Careful
Technical analysis is a method used to predict future price movements. However, it should not be forgotten that such chart formations can be misleading. Such indicators can cause large price fluctuations in cryptocurrencies with high volatility, such as Bitcoin. Patterns are sometimes wrong and can leave investors on the wrong side of the market.
Bitcoin’s price continues to be affected by general trends and macroeconomic developments in the cryptocurrency market. Investors need to make their decisions by taking into account both technical and fundamental analysis data. Price movements in recent days show that the market is narrowly balanced at the support level in most cases.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
