Just below the all-time high of $69,000, the price of bitcoin has shown more volatility in recent days, only to now hover around $67,000. But this boredom could soon end. Following the recent price movements, a notable pattern has emerged on the bitcoin (btc) price chart, as Recognized by experienced crypto analyst Josh Olszewicz.
An inverse head and shoulders (iH&S) pattern, often seen as a bullish indicator, has formed on bitcoin's 1-hour chart, suggesting a possible bullish price move. This pattern, although imperfect according to Olszewicz, is considered marketable in his opinion. “(The) pattern is definitely not perfect, but it's still negotiable in my opinion,” he said.
An inverse head and shoulders (iH&S) pattern is a bullish reversal pattern in technical analysis, which indicates a possible upward reversal in price trends. It consists of three channels, the middle one being the lowest and resembling the shape of a head and two shoulders, but turned upside down.
<img decoding="async" class="wp-image-596869 size-full" src="https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg" alt="bitcoin Inverse Head and Shoulders Pattern” width=”2759″ height=”1317″ srcset=”https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg?w=2759 2759w, https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg?w=460 460w, https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg?w=768 768w, https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg?w=860 860w, https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg?w=1536 1536w, https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg?w=2048 2048w, https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg?w=750 750w, https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-forms-inverse-head-and-shoulders-pattern-eyes-76000.jpg?w=1140 1140w” sizes=”(max-width: 1000px) 100vw, 1000px” loading=”lazy” data-recalc-dims=”1″/>bitcoin Inverse Head and Shoulders (iH&S) Pattern, 1-Hour Chart | Source: X @CarpeNoctom
In this scenario, the bitcoin chart shows the formation with a head at around $59,000 and shoulders forming around the $65,000 and $65,700 mark. The pattern suggests that a bullish move is brewing. Traders often use iH&S patterns to identify potential buying opportunities, with entry points typically near the neckline breakout.
The analyst's chart points to a neckline (red dotted line) sloping downward that will intersect the right shoulder in the coming days. A break above this line is normally required to confirm the pattern. At the current price, bitcoin is trading just below the neckline.
For traders looking for potential targets, Olszewicz's analysis projects an ambitious target of between $73,000 and $76,000, aligned with the Fibonacci extension levels of 1.618 ($72,610.59) and 2 ($75,776.31). These levels represent significant price points that bitcoin could test if the pattern is confirmed with a solid breakout.
One element that could strengthen the potential bullish trip is a breakout in volume, which the analyst has hinted at with a question mark. The volume indicator on the chart shows an increasing trend, but a decisive increase in volume is usually looked for to confirm an iH&S pattern.
Additionally, Olszewicz has marked a potential stop loss level (SL) with a dashed green line. This level around $65,680 serves as a risk management tool for traders in case the pattern fails to make a bullish breakout.
At the time of publication, btc was trading at $67,124.
Featured image created with DALL·E, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
