The recent price action of Bitcoin (BTC) has raised concerns among traders and investors as the digital asset experienced a breakdown on May 11. While there was a subsequent bounce, the failure to reclaim the breakdown level has raised questions about the potential for a further decrease in price. In this article, we will explore the technical analysis and key indicators that suggest a bearish trend for Bitcoin and discuss the implications for its future price movements.

Bearish Head and Shoulders Pattern:

A significant bearish pattern called the head and shoulders has emerged on the daily time frame, signaling potential downside for Bitcoin. This pattern consists of three peaks, with the middle one being the highest. The subsequent drop below the neckline confirms the pattern's validity and often leads to a steep decline. The breakdown from this pattern on May 11 has raised concerns among traders, as it suggests a continuation of the ongoing decrease in price.

Fibonacci Retracement and Resistance Levels:

The Fibonacci retracement principle is a commonly used tool in technical analysis to identify potential price levels for retracement or continuation. In this case, Bitcoin's price failed to validate the neckline as resistance on May 15, indicating a potential further downside. If the pattern is correct, this could lead to more bearish movement in the price.

Relative Strength Index (RSI) and Bearish Trend:

The daily RSI, a momentum indicator used to assess overbought or oversold conditions, supports the bearish trend for Bitcoin. Readings below 50 indicate a bearish trend, and the current reading suggests that bears have the upper hand. This further strengthens the case for a potential continuation of the decrease in Bitcoin's price.

BTC Price Prediction: Evaluating Wave Counts:

Technical analysts often use the Elliott Wave theory to predict future price movements. Two potential wave counts are considered for Bitcoin's future movement. The bearish count suggests that Bitcoin completed a five-wave upward movement and is currently undergoing an A-B-C correction. If this count holds, the price could drop to a minimum of $23,400, aligning with the 0.5 Fibonacci retracement support level.

On the other hand, the bullish count suggests that Bitcoin is currently in wave four of a five-wave upward movement, with a projected increase towards an average price of $33,000. This count contradicts the head and shoulders pattern but aligns with a channel formed by connecting the highs of waves one and three.

Implications of a Breakdown and Confirmation:

A breakdown below the $25,270 high and the potential channel would confirm the bearish count. According to Elliott wave guidelines, wave four should not enter the territory of wave one. If this occurs, the BTC price prediction would anticipate a drop to $23,200.

Conclusion:

Bitcoin is facing a critical moment as it struggles to reclaim the breakdown level and maintain a bullish trend. The presence of the head and shoulders pattern, coupled with the Fibonacci retracement and RSI readings, suggests a bearish sentiment among traders. However, alternative wave counts present conflicting possibilities for Bitcoin's future price movement. As the market awaits further confirmation, investors and traders should closely monitor key levels and indicators to gain insights into the future direction of Bitcoin's price.