Bitcoin Bearish Head-And-Shoulders Pattern Could Invalidate Above This Price Level – Details

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Yesterday, Bitcoin (BTC) surpassed the symbolic $100,000 mark, sparking enthusiasm among Bitcoin enthusiasts who believe the digital currency may carry on its bullish trend and reach unprecedented peaks (new highest prices) in the near future.

Head-And-Shoulder Pattern Bound To Fail?

As Bitcoin regains an important price milestone, there’s been increased chatter among analysts regarding its possible price direction. They are keeping a close eye on bearish trends in the charts, hoping to spot signs that these patterns might not hold, which could indicate the continuation of the bullish trend.

One notable bearish indication observed during December was the emergence of the head-and-shoulders pattern on the daily Bitcoin chart, drawing considerable interest. This configuration was interpreted as a potential warning sign suggesting Bitcoin could undergo a significant dip towards the $70,000 middle range.

As a researcher delving into the world of financial charts, let me explain the head and shoulders pattern from my perspective. For those who are new to this concept, it’s essentially a bearish formation that signals a potential shift from an upward trend to a downward one. This pattern is characterized by three significant peaks: the middle peak, or the “head,” which is the highest, flanked on either side by two lower peaks called the “shoulders.” The crucial ‘neckline,’ serving as a support level, connects the left and right shoulders. A drop below this neckline signifies the confirmation of a bearish trend.

Despite Bitcoin exceeding $100,000, there’s a decreasing chance of the head-and-shoulders pattern emerging. As per crypto analyst Aksel Kibar, recent market movements might prevent the bearish outlook from occurring. Kibar elaborated on this point:

In simpler terms, the Bitcoin to US Dollar (BTCUSD) chart on a daily scale appears to have a head-and-shoulders top formation, which is typically bearish. However, the price is currently testing the high of the potential right shoulder. If this level is breached, it could potentially invalidate the pattern, making it more bullish. The target for such a failure of the head-and-shoulders pattern would be around 116,000 USD.

Kibar pointed out that even if the head-and-shoulders pattern occurs and Bitcoin falls to approximately $73,800, it may not disrupt the overall bullish momentum. Instead, this potential drop could act as a pullback to test the previous all-time high ($73,000) as a new support level.

As a researcher observing the Bitcoin market, it’s notable that since surpassing its March 2024 all-time high (ATH), there has been no significant downturn, with the exception of a flash crash to $90,500 on December 4. In conventional bull markets, we often see dramatic price drops followed by swift rebounds, paving the way for further upward momentum.

Bitcoin Price Projections For 2025

2025 price predictions for Bitcoin generally lean towards optimism. For example, cryptocurrency expert Jason A. Williams anticipates that the value of BTC might surpass $131,500 during the initial three months of 2025.

In a similar prediction, Geoff Kendrick from Standard Chartered bank anticipates that Bitcoin could reach $200,000 by 2025, with key drivers being the accumulation of strategic Bitcoin holdings and growing institutional demand.

Warning from crypto entrepreneur Arthur Hayes indicates potential turbulence for the broader cryptocurrency market, possibly leading to a significant drop (a “harrowing dump”) close to President-elect Donald Trump’s inauguration on January 20th. Currently, Bitcoin is valued at $100,099, experiencing a decline of 0.7% over the past 24 hours.

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2025-01-08 15:41