Bitcoin price looks primed to rebound after a 50% sell-off
- Bitcoin price appears to be developing a head-and-shoulders pattern on its daily chart.
- To form the pattern's right shoulder, BTC needs to rebound to $42,000.
- A spike in selling pressure around this price point could lead to a sell-off that sends Bitcoin to $14,000.
Bitcoin price seems to be holding above a stiff support area that could serve as a rebound point to $42,000.
Bitcoin price to bounce back
Bitcoin price looks prime to surge by roughly 40% after bouncing off the $29,936 support level.
The daily chart shows that BTC is forming a potential reversal pattern known as head-and-shoulders. The bearish setup contains a central peak referred to as the head, while the other two comparable upswings are known as shoulders. Meanwhile, the horizontal support at $29,936 is known as the neckline.
A retest of the said demand level will most likely result in a quick run-up to $42,000, forming the pattern's right shoulder. Slicing through the neckline will result in a breakdown, projecting a 53% sell-off that sends Bitcoin price to $13,891.
This target is obtained by measuring the distance between the head's highest point and the neckline and adding it to the breakdown point.
BTC/USDt 1-day chart
Regardless of the pessimistic outlook, if Bitcoin price slices through $42,000 and produces a daily candlestick close above $43,000, the bearish thesis will face invalidation. Under these conditions, BTC could advance another 5% to test $45,000.
Author
FXStreet Team
FXStreet
