Bitcoin (BTC) Sees Danger Ahead as Multi-Year Bearish Head and Shoulder Pattern Emerges on the Chart

Bitcoin [BTC] has been comfortably moving north lately, with the cryptocurrency managing to climb above $66k again. Now, while this pointed to

Bitcoin [BTC] has been making waves in the crypto-verse lately. After crossing its long-term moving average and key resistance levels in the past few days, the world’s largest cryptocurrency managed to climb above $66k again.

Now, while this pointed to an optimistic turn for the king coin, especially after having faced a minor crash earlier this month, the market might soon take a U turn in the coming days.

This could be the case, especially as a multi-year bearish pattern appeared on BTC’s chart. A closer look at BTC’s 1-day price chart revealed that the coin had formed a head and shoulder pattern on the same.

Bitcoin sees danger ahead

A popular crypto analyst, Ash Crypto, recently shared a tweet highlighting the same pattern on BTC’s chart. This multi-year bearish pattern emerged in 2021, and at press time, the coin’s price approached the neckline support of the same pattern.

As per the tweet, a failed test of the support could result in a massive crash. While the pattern pointed towards a bearish market structure, our analysis revealed that the chances of BTC dropping to its neckline support were less likely.

After having crossed $66k on the charts, more than 49 million BTC addresses were in profit, which accounted for over 92% of the total number of BTC addresses. This massive rally in BTC’s price also led to a huge rise in selling pressure.

As per our analysis of CryptoQuant’s data, BTC’s net deposit on exchanges was high, compared to the last seven days’ average. This highlighted a hike in selling pressure. Whenever selling pressure rises, it often results in price corrections.

Moreover, the coin’s aSORP turned red, suggesting that more investors have been selling at a profit. In the middle of a bull rally, it can indicate a market top. Its NULP also looked bearish. All of these metrics clearly indicated the chances of a BTC price correction.

However, not everything turned against BTC. Our look at Glassnode’s data revealed an optimistic metric. We found that BTC’s NVT ratio was dropping. A decline in the metric means that an asset is undervalued, hinting at a price hike in the coming days.

After having crossed its long-term moving average and key resistance levels in the past few days, the world’s largest cryptocurrency managed to climb above $66k again. Now, while this pointed to an optimistic turn for the king coin, especially after having faced a minor crash earlier this month, the market might soon take a U turn in the coming days.

This could be the case, especially as a multi-year bearish pattern appeared on BTC’s chart. A closer look at BTC’s 1-day price chart revealed that the coin had formed a head and shoulder pattern on the same.

A popular crypto analyst, Ash Crypto, recently shared a tweet highlighting the same pattern on BTC’s chart. This multi-year bearish pattern emerged in 2021, and at press time, the coin’s price approached the neckline support of the same pattern.

As per the tweet, a failed test of the support could result in a massive crash. While the pattern pointed towards a bearish market structure, our analysis revealed that the chances of BTC dropping to its neckline support were less likely.

After having crossed $66k on the charts, more than 49 million BTC addresses were in profit, which accounted for over 92% of the total number of BTC addresses. This massive rally in BTC’s price also led to a huge rise in selling pressure.

As per our analysis of CryptoQuant’s data, BTC’s net deposit on exchanges was high, compared to the last seven days’ average. This highlighted a hike in selling pressure. Whenever selling pressure rises, it often results in price corrections.

Moreover, the coin’s aSORP turned red, suggesting that more investors have been selling at a profit. In the middle of a bull rally, it can indicate a market top. Its NULP also looked bearish. All of these metrics clearly indicated the chances of a BTC price correction.

However, not everything turned against BTC. Our look at Glassnode’s data revealed an optimistic metric. We found that BTC’s NVT ratio was dropping. A decline in the metric means that an asset is undervalued, hinting at a price hike in the coming days.

We then checked Bitcoin’s weekly chart to find out where it might go if the uptrend continues, as suggested by the NVT ratio. As per our assessment, a sustained bull rally could push BTC towards its all-time high once again.

If things fall in place, then the coin might as well reach a new ATH. However, if a price correction happens, then BTC might again fall to $54