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Price Analysis

Bitcoin Firm and Likely to Close above $50k, will a H&S Pattern Form?




Bitcoin is presently hot and cold.

While there are hints of strength reading from price development in the daily chart, there is a worrying reality that the overall trend remains bearish—at least for now.

Bitcoin Market Performance and Price Status

Specifically, a scan of the BTCUSDT daily chart swings for sellers with the situation being worsened by the inability of Bitcoin bulls to breach the 20-day moving average.

There is a retest when writing.

Bitcoin Daily Price Chart for December 23

However, what’s needed is a sharp close above the flexible resistance line, ideally with high trading volumes.

This, technical analysts maintain, would swing the current preview from bearish to bullish.

Encouragingly, should this outlook pan out, it will be the first time since November 16 for BTCUSDT to break the dynamic liquidation level.

Therefore, the top-down preview of the BTCUSDT price chart, at present, as mentioned earlier, beats for sellers.

Although there has been a divergence from the lower BB, signaling strength, the inability for bulls to build up on December 21 gains points to weakness.

Even so, because BTCUSDT prices are still boxed within the December 21 bull bar, short-term price action looks bright.

Reassurance of the uptrend would, however, form once there is a close above $49.5k registering this week’s highs.

On the flip side, an unwelcomed contraction from spot rates below $46.5k might point to further weakness—an affirmation of sellers of November 26, which was solidified by the climactic, wide-ranging high-volume bear candlestick of December 4.

BTCUSDT Bottoming Up?

While BTCUSDT price action might be bearish as per the development in the daily chart, some traders remain hopeful.

A scan of Bitcoin’s on-chain metrics, especially, points to a bright BTC future. In this case, Bitcoin Net Unrealized Profit and Loss (NUPL) indicator is bottoming up and recovering from a critical point where previous BTCUSDT prices reversed in 2021.

The on-chain indicator is used to track the position of long-term BTC holders. It is created by dividing unrealized profits from unrealized losses. This way, it measures the profitability of each BTC holder if coins were sold today.

On-chain data now show that Bitcoin prices might be bottoming up—a net positive for bulls.

BTCUSDT on the Cusp of a Breakout?

Aforementioned, BTCUSDT prices are consolidating and retesting a critical resistance line in the 20-day moving average.

What would be ideal is a close above $50k, confirming gains of December 21.

If this prints out, BTC prices would likely tear, reversing the steep losses of December 4.

One trader, however, is positive of Bitcoin’s outlooks based on the development in the daily chart. He observes that BTCUSDT is within a pennant.

Therefore, if past performance guides the future, BTC bulls would not only close above $50k but clear $68k for new all-time highs.

Bitcoin Head-and-Shoulder (H&S) Pattern

One trader on YouTube remains positive on the BTCUSDT outlook. He notes that BTC prices would likely recover from spot rates.

Still, bulls need to clear $53k should there be a bounce, reaffirming the uptrend.

If, instead, there is a rejection at around $53k—a critical resistance level–, BTCUSDT would complete a head and should pattern. In that case, BTCUSDT prices may plunge back to the neckline at around $40k—continuing selling pressure of November 2021.

Chart Courtesy of Trading View

Disclaimer: Opinions are those of the author and are not financial advice. Do your research.