Bitcoin is consolidating below its point of control after hitting key resistance, establishing a bearish trend in the lower timeframe. The current situation may indicate a shift in market sentiment, warranting careful monitoring by traders for potential future movements. Whether the price holds below or reclaims the POC could determine its trajectory in the near term.
Bitcoin (BTC) is currently trading below a significant resistance point after facing rejection from it. The lower timeframe trend is bearish, and this could impact the higher timeframes moving forward, making it crucial for traders to stay alert about these developments.
Recently, Bitcoin returned to a key trading range after being rejected at a local high. Currently, it’s consolidating beneath the point of control (POC). This change aligns with what appears to be a swing failure pattern and a bearish harmonic structure activation, both contributing to an ongoing price retracement. Although this pullback hasn’t yet resulted in a breakdown on higher timeframes, it does indicate a shifting sentiment that traders need to heed.
The main technical points to consider include:
1. Dynamic Resistance Intact: The price has been unable to surpass a major resistance trendline since the April 23 high, continuing a pattern of lower highs.
2. Price Below Point of Control: With Bitcoin stuck beneath the volume-weighted POC, if the price remains at these levels, further downward range movement may follow.
3. Bearish Lower Timeframe Trend: A pattern of lower highs and lower lows persists on lower timeframes, which could start influencing the higher timeframe if the trend remains unchecked.
Diving deeper, Bitcoin’s latest dip began at the April 23 high, coinciding with both the POC and a bearish harmonic pattern. This led to a pullback returning the price to a precisely defined range, losing the value area high in the process. Now, Bitcoin is consolidating just under the POC, an area characterised by high volume and previous equilibrium.
A critical aspect of the current trend is the steady creation of lower highs and lower lows on the lower timeframes, which persists under a dynamic resistance level, limiting any upward momentum for now. Until this bearish trend is broken, the immediate outlook seems rather cautious.
Behaviour surrounding the POC could be indicative of Bitcoin’s next moves. Should the price continue to be accepted below this level, there’s a possibility that the market could rotate lower, probing deeper support. Conversely, re-establishing the POC with a higher low might signal an initial shift towards bullish sentiment.
Looking ahead in the price action, Bitcoin’s position beneath the POC and resistance suggests a short-term bias towards the downside. If rejections from overhead resistances persist, this could lead to a deeper retracement within the current range. However, if the POC is reclaimed and a higher low forms, that might hint at a shift in momentum towards buyers. For now, it’s imperative for traders to keep a close eye on the evolving lower timeframe structures and gauge their potential impact on the overall market direction.
