BTC Short setup
2025-01-06
Category: None



## Technical Analysis of BTC Based on Volume Footprint Chart & One-Day Chart

Overview:
The one-day volume footprint chart of Bitcoin (BTC) presents critical signs indicating a potential decline in price, highlighted by a decrease in buy orders, the formation of a head-and-shoulders pattern, and the emergence of a rising wedge.

1. Decrease in Buy Orders:
The volume footprint chart indicates a decrease in buy orders, which is a bearish signal. When buy orders decrease while prices maintain or rise slightly, it suggests weakening demand. This lack of buying pressure could lead to downward price movement, as sellers may drive the market lower when buyers are not stepping in to absorb excess supply.

2. Head-and-Shoulders Pattern:
The identification of a head-and-shoulders pattern further supports the bearish outlook for BTC. This classic reversal pattern consists of three peaks: a higher peak (head) between two lower peaks (shoulders). The completion of this pattern typically signals a trend reversal from bullish to bearish. Traders should closely watch the neckline; a break below this level would likely confirm the bearish scenario and could trigger further selling pressure.

3. Rising Wedge Pattern:
The presence of a rising wedge pattern adds another layer of bearish sentiment to the technical analysis. A rising wedge is characterized by converging trend lines and usually occurs during an uptrend, indicating that buying momentum is slowing. The price action within this formation creates higher highs and higher lows, but the narrowing range suggests that bulls are losing strength. A breakdown from this pattern typically results in a price decline, further corroborating the expectation of an impending drop in BTC prices.

Conclusion:
Given the confluence of these technical indicators—decreasing buy orders, the formation of a head-and-shoulders pattern, and the rising wedge—BTC appears poised for a decline in the near term. Traders should prepare for potential bearish actions, especially if BTC breaks below critical support levels indicated by the head-and-shoulders neckline and the lower trend line of the rising wedge. It is advisable to monitor these patterns closely in conjunction with volume trends to make informed trading decisions.
Selling Area 99700/103900



Additionally, the hourly resistance, bearish divergence, and rising wedge pattern indicate potential downside for BTC.