Bitcoin (BTC) is exhibiting a slightly bullish trend, currently trading at $92,647. However, technical analysts, including Melika Trader, warn of a potential reversal as a head-and-shoulders pattern emerges on the 4-hour chart of BTC. This pattern, highlighted by a double-headed top and a forming right shoulder, suggests the possibility of a sharp decline. Melika predicts that if Bitcoin breaks out above the $87,000–$88,000 resistance zone only to reverse, it could fall to $78,000, echoing support levels seen in March. “This scenario is a textbook bull trap,” Melika explains, indicating that while the neckline holds, Bitcoin’s momentum is weakening.

The recent Bitcoin rally is partly due to the U.S. Dollar Index (DXY) falling below 100, diminishing the dollar’s value and increasing Bitcoin’s attractiveness as a hedge against macroeconomic shifts. This has pushed daily trading volumes above $37 billion, cementing BTC’s leading position with a market cap of $1.83 trillion. Despite facing major resistance and psychological barriers, particularly around the $94,737 and $100,000 marks, the long-term outlook for Bitcoin remains tentatively optimistic given its limited supply.

For those new to trading, here are potential strategies:
– Consider buying on a bounce from $91,585 with a bullish candle close.
– Alternatively, enter upon a confirmed breakout above $94,737 backed by strong volume.

Trade targets might include a primary goal of $96,525 and a secondary one of $98,386, with stop loss options placed conservatively below $89,631 or more aggressively below $90,610. With the 50-period EMA rising at $88,405 and a shift in the MACD histogram to red, traders are advised to proceed with caution, watching for false breakouts that could precede a drop.

In summary, Bitcoin is at a crossroads, potentially facing either a significant breakout or a deceptive bull trap. A sustained push above $94.7K could pave the way to $98K. Yet, the unfolding head-and-shoulders pattern warns of a possible plunge to $78K. As always, trading decisions should be based on confirmed price movements rather than speculative momentum.