Bitcoin (BTC), Head and Shoulders 'Crack'... Next Defense Line $71,000

▲ Bitcoin (BTC)

Bitcoin (BTC) has broken below the head and shoulders neckline. If it drops further, $71,000 is cited as the next target.

According to BeInCrypto on September 3 (local time), analyst Wealthmanager analyzed that Bitcoin went below the neckline of the head and shoulders pattern and is now attempting to re-break above it. He said, “The price has already lost the neckline and is now retesting it,” adding, “If it is rejected here, it could drop to $71,000.” Conversely, if it reclaims the neckline and holds above it, the bearish scenario becomes invalid.

Seasonal trends also support the possibility of a decline. Bitcoin rose 24.95% in August, recording its strongest August performance since 2017. Coinglass data shows four instances where Bitcoin rose in August and then closed lower in September. The declines were 1.76% in 2013, 7.44% in 2017, 7.51% in 2020, and 7.03% in 2021. The median value is 7.24%.

Applying this median value to Binance's September opening price of $78,516 yields $72,831. However, the sample is limited to only four instances over the past 13 years. In the last three years, September has always closed higher. BeInCrypto pointed out that there are limitations to concluding a September decline based solely on seasonality.

On-chain data also suggests lower defense lines. Glassnode identified $62,000-$65,000 as a key accumulation zone formed during the summer correction. The $60,000-$63,000 range also has a zone where long position liquidations could concentrate. Conversely, long-term holders' holdings are concentrated at $83,000-$86,000, hindering an upward breakout. Glassnode stated, “Until the supply at the upper level is absorbed, $62,000-$65,000 will be the main downside benchmark.”

In the short term, the re-breakout of the neckline is the first turning point. If it fails to re-break, $71,000 opens up as a technical downside target. The price range applying seasonal trends is $72,831, and in a deeper correction, $62,000-$65,000 has been presented as a structural support zone.

[Article Key Summary]

-Analysis suggests that Bitcoin could drop further to $71,000 after breaking below the head and shoulders neckline.

-Applying the historical median September decline rate of 7.24% after an August rise yields $72,831.

-Glassnode presented $62,000-$65,000 as a key structural support zone in a deeper correction.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*