Bitcoin price is toying with the idea of completing an inverse head-and-shoulders (H&S) pattern. This follows a rollercoaster ride that saw the largest cryptocurrency drop by more than $1,000 in less than 24 hours to test support at $7,650.
A reversal has since occurred but it is not significant to clear the resistance at $8,000. For this reason, BTC/USD teeters at $7,901 at the time of writing. Bitcoin has lost 0.43% of its value on the day amid growing building bearing momentum.
The price is also dancing under the moving averages in the daily range. The 200-day SMA holds the ground at $8,666 while the 50 SMA at $9,262. In the same range, the Relative Strength Index (RSI) is stuck in the zone at 30. Recovery has not been forthcoming owing to the key selling pressure at $8,000. However, the RSI has avoided the oversold region like plague; a move that is risky for Bitcoin because it means that the crypto is not yet oversold and the bears still have room to play.
BTC/USD daily chart
The Inverse Head-and-Shoulders Pattern
The current H&S pattern has been forming for a long time. The drop to $7,650 initiated the completion of the right shoulder of the pattern. An expected reaction to the H&S pattern following the right shoulder is a bull run likely to push BTC/USD above $10,000 and test February highs marginally above $10,500.
Bitcoin Key Levels
Spot rate: $7,901
Relative change: -33.79
Percentage change: -0.41%
Trend: Bearish
Support: $7,800 and $7,650
Resistance: $8,000, $9,000 and $10,000
