Bitcoin Faces 15% Retracement Risk as Bearish Pattern Emerges

Bitcoin's recent price movements have brought it to a critical point, with a newly confirmed bearish shark harmonic pattern on its intraday chart indicating a potential short-term retracement. This pattern, which typically forms at the end of extended corrective moves, suggests that Bitcoin may be preparing for a healthy pullback into deeper volume-supported zones.

The value area high (VAH) is currently under pressure, acting as a key inflection point. If Bitcoin fails to maintain its position above this level, the next logical targets include the point of control (POC) and the 0.618 Fibonacci retracement. These levels offer strong confluence as support zones, with the point of control representing the highest volume node within the visible range and the 0.618 Fibonacci retracement being a widely recognized support level in technical analysis.

Volume metrics further support the retracement thesis. The recent price surge lacks the explosive profile of a short squeeze, raising doubts about its sustainability. Unlike previous surges characterized by aggressive forced buying, the current rally has unfolded on average volume, without signs of strong buyer commitment. This weakens the bullish case and opens the door to a long squeeze, a slow unwind of long positions that forces traders to exit as price dips toward lower support levels.

A decisive breakdown from the VAH would confirm the bearish harmonic and signal a controlled move into deeper support areas. Such a retracement would not only be technically valid but also constructive, allowing Bitcoin to reset within its current range before attempting another breakout. This would provide a healthier foundation for future price movements, as it would allow for a more gradual and sustainable increase in value.

Ask Aime: Should I buy Bitcoin now, or wait for a pullback?

In summary, while Bitcoin's recent price increase has brought it into technically significant territory, the emergence of a bearish shark harmonic pattern suggests a potential reversal following the recent grind to local highs. Key support zones lie beneath the current price, acting as logical targets if the VAH is lost. Volume behavior supports this retracement thesis, as the current rally has unfolded on average volume, without signs of aggressive forced buying. All eyes are now on the VAH, as a decisive breakdown from this level would confirm the bearish harmonic and signal a controlled move into deeper support areas.