BTC at critical support, but sings point downIn this weekly chart we can more easily see the rising Head and Shoulders pattern, followed by a long flag pattern lasting over two months. The H&S pattern is confirmed by the volume and with the breakout from the flag today (closing price at $35800 at time of writing, or more than 3% previous close), we next must watch the green dotted line support. If the probable break from that support happens, I'm expecting it to tumble to around $29000, presenting the next opportunity for reversal based on standard measurement of a head and shoulders pattern.
Key learnings:
- H&S pattern has higher volume on left shoulder than the head.
- pattern breakout is when closing price is more than 3%. In this case, BTC price close is more than 5% lower than the support trend line of the flag pattern.
- measurement principle for H&S is about half the height from neckline to the top of the head, so expect drop to $29000
