BTC/USD appears poised for further underperformance
|Weekly price action
It was a disappointing week for the major crypto pairing, down -5.1%; BTC/USD chalked up a meaningful bearish engulfing candle formation on the weekly scale (engulfing candles focus on the real bodies and overlook the upper and lower shadows [those are outside reversal candles]) at the upper boundary of a potential long-term bullish flag pattern, extended from the all-time high of $73,845.
Does this mean the unit is headed for weekly support from $56,796, and the uptrend is under threat? Not necessarily, but further selling could be on the table this week, according to the daily chart.
Daily price action
We have a lot going on from the daily chart.
The FP Markets Research Team recently noted an inverted head and shoulders pattern (left shoulder: $59,559; head: $56,478; right shoulder: $60,165) formed. The advance sent price through the pattern’s neckline mid-May, a descending line extended from the high of $67,273, and permitted traders to pencil in the pattern’s profit objective – taken from the value between the head and the neckline and extended from the breakout point – which shares chart space with the all-time high of $73,845 at $73,756.
Since then, we have seen the unit form a possible double-top formation at $71,942. The only technical hurdle stopping the pair from moving lower (and essentially completing the pattern) is a decision point area at $64,612-$66,484. While we saw Friday drop deeper into the decision point zone, a move below here would likely unlock the trapdoor for sellers to target the inverted head and shoulder’s low from $60,165.
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