In case you missed it, earlier this week, a rise in risk appetite propelled Bitcoin (BTC/USD) from its sub-$20,000 lows to once again rise over the $25K turning point that acted as resistance in March.
When the sellers gained control, BTC/USD even reached the $26K barrier, a nine-month high!
Since then, BTC/USD has not reached new records.
Is the original crypto about to reverse course?
I am examining the Head and Shoulders pattern that appeared throughout the one-hour period.
In the event of a break below the pattern's "neckline," BTC/USD might decline by the pattern's full height. This entails a visit to the $23K or $22K psychological levels in this instance.
Naturally, how prices move in the future will depend on how the market feels for the remainder of the week.
When local authorities intervene to reduce depositor fears, all eyes will be on European and American banks.
Then there is today's policy statement from the European Central Bank (ECB). More traders will factor in a less aggressive tightening plan from the Fed if ECB President Lagarde and her team sound less pessimistic than they did last week.
BTC/USD may rebound from its present levels to retest its $25K or $26K highs if risk appetite returns.
But, if risk-takers are still scared off by contagion worries, BTC/USD may break below the Head and Shoulders neckline and retest important levels like $22,500 or $21,500.
How do you feel? Is the rise in BTC/USD from below $20K a bull trap? Or are we witnessing the beginning of a more prolonged reversal?
