Bitcoin (BTC) Bulls Defend $94K Support as Head-and-Shoulders Pattern Looms

After dropping to $91,500 on Dec. 30, Bitcoin bulls made a concerted effort to prevent BTC price from closing the year below the neckline of an ominous head-and-shoulders pattern

Bitcoin price dropped to a low of $91,500 on Dec. 30, sparking concerns among traders that BTC could close the year below the neckline of an ominous head-and-shoulders pattern on the daily timeframe.

As highlighted in a Dec. 30 Cointelegraph article, a confirmation of the head-and-shoulders pattern on BTC price would hint at a downside target in the range of $80,000 to $76,000.

BTC/USD (spot) Coinbase. Source: TradingView.com

Several analysts have pointed to the crucial support level of $94,000, emphasizing its importance in keeping BTC within its current trading range of $92,000 to $100,000.

The intra-day rally on Dec. 31 to a high of $96,250 appeared to reflect this effort among traders to keep BTC price above the key support zone.

According to Aksel Kibar, a chartered market technician,

“Despite the price run up to $96,250, I think it's important to note that sellers and margin shorts still have the upper hand on Bitcoin's price action at the moment.

Data from TRDR.io shows spot selling at most exchanges, and the price breakout today was primarily futures driven.”

Related: Here’s what happened in crypto today

As highlighted in previous Markets Outlook articles, intra-day rallies toward the upper range (around $96,000–98,000) faced selling pressure, while bids at key support levels, such as $93,000, were quickly absorbed.

However, the uptick in buy volumes in the perpetual futures market toward the later hours of Dec. 31 suggested that margin longs were also opening at these dips to the lower range ($91,000 to $93,000).

BTC/USDT Binance perps. Source: TRDR.io

Popular crypto trader Skew described Bitcoin price as being “stuck in a void between liquidity here going into a new year” and suggested that traders keep an eye on bid and ask liquidity to see if any imbalances arise over the coming days.

Regarding Bitcoin’s head-and-shoulders pattern, the most ideal scenario would involve BTC holding $94,000 to $94,500 into a daily close, followed by traders making a run at the next block of asks at $98,800.

BTC/USDT Binance perps. Source: TRDR.io

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