BTC/USD, ETH/USD: Technical Outlook, Edition #43 (06/07/21)

BTCUSD, Head and Shoulders - is this popular chart pattern a wolf in sheep's clothing? Catch the latest developments in crypto price-action and check out Q's Conclusion for ETH

Chart Pattern: Head and Shoulders, a wolf in sheep’s clothing for BTC?

Once more, Bitcoin demonstrates why the 'Head and Shoulders' (HnS) should be taken with a grain (bucket) of salt when it comes to trading BTC/USD.

This pattern is usually a false set-up to draw in liquidity and trap buyers/sellers on both sides - HnS can make for some very painful trades.

The H4 below depicts a sloped 'HnS' pattern - observe where the right shoulder (RS) falls below USD 34K.

We can see that price-action then bounces up from USD 33K, attempting to reclaim uptrend support currently around USD 35K. 

Bitcoin, BTC/USD - 4 Hour (H4)

Bulls have their first H4 candle close back inside uptrend support and must now plant a second quickly. 

Losing bullish momentum here again at USD 35K would likely be the decisive nail in the coffin, preceding a drop to USD 30K. 

Both bulls and bears must be wary of only playing one side of the market.

Buyers, remain vigilant and keep an eye out for a bullish re-test. Conversely, a bearish re-test is of particular interest for those selling Bitcoin. 


We've accommodated both sides of the aisle with our forecasts for bulls and bears below:

Bitcoin, BTC/USD - 4 Hour (H4)

Q's Conclusion

Both buyers and sellers must not allow greed or optimism to interfere with prudent judgement.

Structurally speaking, ETH/USD looks far more bullish than BTC/USD. 

Downside risk compels Ethereum to put in another higher high soon - otherwise, the second-largest cryptocurrency is in jeopardy of being dragged down with Bitcoin.

Check out the H4 ETH/USD forecasts below:

Ethereum, ETH/USD - 4 Hour (H4) 

See you again for the next update.

- q

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