As the price of Bitcoin (BTC) continues to the pullback phase, sellers are eyeing the $98,664 level as bullish momentum fades.
This week, the crypto market has experienced increased volatility following Donald Trump’s inauguration on Monday. This surge briefly propelled Bitcoin to a new all-time high of $109,111 before quickly reversing.
During the ongoing pullback, Bitcoin has dropped from the $109k resistance zone to below $102k, marking a loss of nearly 5%. Will the pullback restore the exhausted bullish momentum, or is this the start of another correction for the crypto market?
Bitcoin Price Analysis
Since mid-December, Bitcoin has struggled to maintain levels above the $108k resistance, leading to a sideways trend. The long-wick rejection candles in the $108k-$109k range suggest that sellers are actively defending these levels and maintaining control.
Bitcoin Price Chart
On the 4-hour chart, the latest Bitcoin reversal has formed a classic head-and-shoulders pattern, which is a bearish formation. This pattern is characterized by three peaks, with the middle extending higher than the two nearly equal-length peaks.
If the pattern holds, Bitcoin’s price could drop by approximately 1.5% to test the 100-day EMA line.
Technical indicators are showing increasing seller dominance. A fresh downturn in the 20-day EMA highlights the growing bearish sentiment. Likewise, the Relative Strength Index (RSI) breaking below the midline signals growing selling pressure.
Bitcoin Price Targets
A bearish breakdown below the 100-day EMA, in line with the Head and Shoulders pattern, could accelerate the downward momentum for Bitcoin. Theoretically, the post-breakdown decline could match the distance from the head to the neckline, which, if true, would bring Bitcoin’s price down by 3.40% to the $98,664 support.
On the other hand, a rebound could see Bitcoin challenge the $103,625 level again. At press time, Bitcoin is struggling to maintain above the $101K price level.