Bitcoin (BTC) Technical Analysis: Worrying Pattern Emerges as Bulls See $3,700 Level Slip Away

Nothing in this article is to be construed as investment advice. Neither the author nor the publication assumes any responsibility or liability for any investments, profits or losses you may incur as a result of this information.

Bitcoin (BTC) appears to have dealt bulls a blow, losing all momentum over the weekend and beginning to slide away from the $3,700 level.

On Friday, the asset reached maximum consolidation inside a bullish falling wedge shape (black dashed line) and leaped over 10%, rising from $3,410 to $3,800. From there on, however, the price action corrected to the $3,700 support below, and the vigorous buying sentiment disappeared as quickly as it had emerged.

On Monday, the price action over 1-day candles is beginning to resemble a pump-and-dump pattern that became visible around January 6, when BTC soared over $300 in a single day, consolidated against a resistance for around four days, and finally crashed by more than $460 in a matter of hours.

Right now, Bitcoin has already gone through a huge pump and is starting to consolidate against a strong resistance at $3,700, with indications that trading confidence is already starting to slip away. This could be another setup for a heavy bearish breakout potentially threatening to breach the strong downtrending resistance if it unfolds like the earlier pump-and-dump pattern.

-On the Bollinger Bands, BTC is currently seen performing at the top of its range and is therefore likely to correct soon.

-On the Ichimoku indicator, the Tenkan-Sen line has not yet converged above the Kijun-Sen line to signal a bullish reversal.

-Trading volume is thinning out.

-Momentum on the RSI indicator is showing a strong correction back down into the lower part of the index channel.

-Selling pressure on the CMF indicator also appears to be increasing.

Bitcoin price targets

If the current price movement does turn out to be another pump and dump, the following supports can be expected to be key levels going forward.

S1: $3,600 (-2.17%)

S2: $3,435 (-6.66%)

S3: $3,300 (-10.33%)

All losses are calculated on Bitcoin’s current value at $3,680.

Reading now