- Bitcoin price could run back up towards $44,000 to complete a head and shoulders pattern.
- BTC price is printing a bullish hammer on the daily chart.
- Invalidation is a breach below $36,400
Bitcoin price could go for a countertrend rally. The risky countertrend move could unfold impulsive as wave C of B.
Bitcoin price could rally up then back down again
Bitcoin price could continue to fake out traders as Smart Money has completed a successful liquidity hunt two Mondays in a row. The BTC price likely trapped traders looking to short the digital asset into $33,000. The BTC price could continue to rally higher in hopes of liquidating as many short traders as possible.
Bitcoin price trades at $40,166 after today's fakeout. If market conditions remain the same for the next few hours, the bulls will have established a bullish hammer candle which could spark a new uptrend rally for the Bitcoin price. The volume indicator profile looks poised for bullish price action after today's trading session.
BTC/USDT 1-Day Chart
Analyzing the current downtrend scenario, the potential bull run into $44,000 would finish a very classical head and shoulders pattern. Traders should keep in mind the uptrend rally would be considered wave C of B within the pattern. Thus stronger drops could follow once the target is reached. Nonetheless, it is best to take this trade idea one step at a time.
Invalidation for the short-term bullish thesis is a breach below $36,400 which forecasts a 1-1 setup for traders aiming for the $44,000 target. If the bears manage to breach $36,400, the $33000 target would be the next bearish target resulting in up to a 17% drop from the current Bitcoin price.
BTC/USDT 4-Hour Chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.