Bitcoin (BTC) plummeted to its lowest point since March 17, reaching $26,100 on Bitstamp due to fears of a “head-and-shoulders” pattern that would give bears the upper hand. Despite promising macroeconomic conditions for risk assets, Bitcoin was unable to capitalize on the potential for gains as bid liquidity decreased.

Concerns Over “Head-and-Shoulders” Pattern

On daily timeframes, market participants were concerned about whether the BTC/USD pair would continue to stay low after three local tops, which created a visible “head-and-shoulders” pattern on the chart. If this pattern were to be confirmed, it would set a negative precedent. Some financial commentators and traders were urging for the price to rise above $27k to avoid this pattern and make things more interesting.

Analysts’ Predictions for Bitcoin’s Future

While some traders were predicting a deeper retracement to $25,000 or lower, analyst Philip Swift was more confident that the worst losses were over. He noted that while the price was falling, the long/short ratio had diverged, with long positions now prevalent. Coinglass data also put the long/short ratio at 58.7% long at the time of writing on May 12. Despite the uncertainty surrounding Bitcoin’s future, many analysts remain optimistic about its long-term potential.

Analysis

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