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Bitcoin price hit $30,369 on Saturday, its highest level since July.
While bulls could push higher in coming weeks, the immediate outlook suggests a bearish flip.
Crypto analyst Ali points to the TD Sequential indicator as hinting at a sell signal.
Bitcoin price rose to its highest level since July when it broke above $30k to reach highs of $30,369 on Saturday. BTC is indeed looking for its fourth-biggest weekly gains year-to-date.
However, although the benchmark crypto trading around $29,950 at the time of writing, an analyst says further retreat is possible given the potential for a key bearish signal.On the upside, market observers see a flip and weekly candle close above $31k as what bulls need to take control of the prevailing volatility.
BTC price shows sell signal
According to crypto analyst Ali, the potential for a head-and-shoulders pattern for BTC on the daily chart has received greater attention across the market. And in a chart shared on X on October 22, the analyst points to the possibility of the scenario unfolding given a key bearish signal – the TD Sequential indicator.
Other than the sell signal hinted at after BTC price rose over the past several days, the overextended outlook is added to by the daily RSI that has previously triggered notable pullbacks.
“The $BTC daily chart hints at a possible sell signal emerging tomorrow, based on the TD Sequential indicator flashing a green 9 candlestick. Not to mention, the RSI reached 74.21 — a level triggering sharp corrections since March,” Ali wrote on X.
Based on this outlook, the analyst noted:
“An impending price correction appears to be on the horizon unless #BTC manages to clock a daily candlestick close above $31,560.”
There’s a lot of talk around a potential head-and-shoulders pattern forming in #Bitcoin daily chart. Let’s dissect it!
The $BTC daily chart hints at a possible sell signal emerging tomorrow, based on the TD Sequential indicator flashing a green 9 candlestick. Not to mention, the… pic.twitter.com/h7CiwRFcHb
— Ali (@ali_charts) October 22, 2023
A flip lower from the current resistance zone, and confirmation of the H&S pattern could mean a retest of immediate support around $28,492. A slight sell-off could also reignite the bearish target of $25k.
The flipside could be catalysed by positive ETF news, with buyers targeting a run to the $40k area.
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