Hello, Publish0x!
Today I'd like to talk about a Head & Shoulders pattern on the 4hr chart of BTC/USD.
The H&S pattern is a bearish reversal pattern and the target of the H&S is located at around $43000.
Important support areas:
What are important support areas we want to hold?
Of course, we don't want to break the neckline located at around 47300, but there are some more support areas that could help the bulls.
Well, right now we can look at a support area being broken while writing this at the levels between $47500 and $48500 and it would be better for the bulls to keep us above this area.
We're also breaking a Fibonacci Retracement Level right now, located at around $47794 which the bulls have to hold onto because the next important Fib Level that could act as support is down at $46294.
The daily chart:
On the daily chart, we're still going strong and right now I do favor the bulls, but we need today to hold above the EMA 21 (Exponential Moving Average) today with again a bit more buy volume to stay bullish. I've colored the 21 EMA orange in the following picture. That EMA is located at around 48000 right now.
Another support preventing us from completing that bearish H&S pattern could be the Fib Retracement on the daily chart. We just got rejected by the 0.382 level and the next support is sitting around $46639, which is above our H&S target area.
Falling below that 0.236 area could bring us back down to almost exactly the breakout target of the H&S pattern. You can look at that in the picture below.
In conclusion:
I'd like to see us back above $48000-$48500 on the 1hr and 4hr charts soon, especially because I have a Long position open at $49600. We really have to hold up these levels of support to have the daily close above $48000. Right now I still favor the bulls but a confirmed breakout under $46300 could make me bearish.
As always, no financial advise.
Thank you for reading, I wish you a nice rest of the day and hope you enjoyed the read.
