BTC HEAD&SHOULDER
Key Observations
1. Head and Shoulders Pattern:
A clear head and shoulders formation is identified, with the left shoulder, head, and right shoulder well-defined.
The neckline is slightly sloping and serves as a key support level. A breakdown below this line would confirm the bearish pattern.
2. Measured Move:
The measured move is calculated by taking the distance between the head and the neckline and projecting it downward. This aligns with a major support zone below the neckline and suggests further downside if confirmed.
3. Indicators:
RSI: Currently below the midline, indicating weakening bullish momentum and leaning bearish.
OBV (On-Balance Volume): Trending downward, signaling reduced accumulation and fading buying pressure.
Volume: No significant spikes near the neckline yet, meaning confirmation of a breakdown is still pending.
4. Fibonacci Levels:
The retracement levels suggest key support zones below the measured move target. A deeper correction could align with these levels if momentum accelerates.
Scenarios
Bullish:
A strong rebound from the neckline and a breakout above the nearest resistance level (right shoulder region) would invalidate the head and shoulders, paving the way for a continuation of the prior uptrend.
Bearish:
A confirmed breakdown below the neckline triggers the measured move, with price potentially heading toward the calculated target. A further breakdown beyond this level could align with deeper retracement zones.
Recommendation
Monitor the neckline closely for a breakout or breakdown.
Look for volume confirmation to validate the move. Lack of volume could indicate a false breakout/breakdown.
Use the measured move target for planning potential entries/exits and manage risk accordingly.
1. Head and Shoulders Pattern:
A clear head and shoulders formation is identified, with the left shoulder, head, and right shoulder well-defined.
The neckline is slightly sloping and serves as a key support level. A breakdown below this line would confirm the bearish pattern.
2. Measured Move:
The measured move is calculated by taking the distance between the head and the neckline and projecting it downward. This aligns with a major support zone below the neckline and suggests further downside if confirmed.
3. Indicators:
RSI: Currently below the midline, indicating weakening bullish momentum and leaning bearish.
OBV (On-Balance Volume): Trending downward, signaling reduced accumulation and fading buying pressure.
Volume: No significant spikes near the neckline yet, meaning confirmation of a breakdown is still pending.
4. Fibonacci Levels:
The retracement levels suggest key support zones below the measured move target. A deeper correction could align with these levels if momentum accelerates.
Scenarios
Bullish:
A strong rebound from the neckline and a breakout above the nearest resistance level (right shoulder region) would invalidate the head and shoulders, paving the way for a continuation of the prior uptrend.
Bearish:
A confirmed breakdown below the neckline triggers the measured move, with price potentially heading toward the calculated target. A further breakdown beyond this level could align with deeper retracement zones.
Recommendation
Monitor the neckline closely for a breakout or breakdown.
Look for volume confirmation to validate the move. Lack of volume could indicate a false breakout/breakdown.
Use the measured move target for planning potential entries/exits and manage risk accordingly.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.