Bitcoin, will it retest $70,000 to fill the 'imbalance zone'?

▲ Bitcoin (BTC)/AI generated image ©

A warning has been issued that the 'price imbalance' created by Bitcoin during its short-term rally could trigger a pullback and act as a bearish trigger.

According to crypto media outlet Bitcoinist on April 24 (local time), Bitcoin (BTC) recently broke above $78,000 during a weekend rally, rising to $79,380 intraday, but it is analyzed that this process left an 'imbalance zone (imperfection)' that the market is attempting to fill again.

Crypto analyst Minga diagnosed that, based on the 4-hour chart, Bitcoin has currently entered a phase of filling this imbalance. Specifically, the chart shows the formation of a head and shoulders pattern, a typical bearish reversal pattern, and with the left shoulder and head sections already completed, the process of forming the right shoulder is underway.

The key resistance zone is presented as $76,800 to $77,400. If the uptrend is halted in this zone, it will transition into a 'distribution zone,' and there is a high probability of large investors liquidating their holdings. The pattern's neckline is in the mid-$73,000s, an area that overlaps with the uptrend line that has supported the price recently.

In case of a decline, a key observation point is the previous monthly high of $76,053. If it breaks below this price again, further downside to $70,450, identified as a liquidity target, could open up, according to analysis. Conversely, if this support level is maintained, the bearish scenario will be invalidated.

An upside scenario is also open. If Bitcoin breaks above $78,332 and settles above that zone, the next target is presented as the monthly imbalance zone near $79,388. Currently, Bitcoin is trading around $77,640, showing a trend where its direction is being tested just above the key resistance zone.

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