bitcoin (btc) crossed the psychologically significant $100,000 price level yesterday, fueling optimism among bulls that the digital asset could continue its upward momentum and hit new all-time highs (ATH) in the coming weeks.
Is the head and shoulders pattern destined to fail?
With bitcoin reclaiming a key price level, speculation about its future price trajectory has intensified. Analysts are closely monitoring bearish chart patterns for potential invalidation, which could signal a continuation of the uptrend.
One such bearish formation is the head and shoulders pattern on the daily chart, which attracted a lot of attention throughout December. This pattern was seen as a possible sign that bitcoin could see a strong correction to the mid-$70,000 range.
For the uninitiated, a head and shoulders pattern is a bearish chart formation that indicates a possible reversal from an uptrend to a downtrend. It has three peaks, with the middle peak being the highest, known as the “head”, flanked by two lower peaks called “shoulders” and a neckline that acts as a critical support level. A break below this neckline confirms the downtrend.
However, with bitcoin surpassing $100,000, the likelihood of the head and shoulders pattern materializing has decreased. According to crypto analyst Aksel Kibar, current market trends suggest that the bearish scenario may not play out. Kibar explained:
BTCUSD A similar head and shoulders peak formed on the daily scale. The price is now challenging the high of the possible right shoulder. Violation may result in a denial of the pattern and should be considered bullish. The head and shoulders flop price target stands at 116,000.
Kibar also noted that even if the head and shoulders pattern develops and bitcoin falls to $73,800, it still might not disrupt the broader uptrend. Such a pullback would likely serve as a pullback to test the previous ATH around $73,000 as a new support level.
It is worth noting that since surpassing its March 2024 ATH, bitcoin has not seen a major pullback, aside from a sudden drop to $90,500 on December 4. Typically, bull markets are characterized by sharp price declines followed by rapid recoveries, setting the stage for the next leg up.
bitcoin Price Projections for 2025
bitcoin price forecasts in 2025 remain overwhelmingly bullish. For example, cryptanalyst Jason A. Williams predict that btc could reach $131,500 in the first quarter of 2025.
Similarly, Standard Chartered analyst Geoff Kendrick imagine bitcoin will rise to $200,000 by the end of 2025, driven by factors such as bitcoin's strategic reserves and growing institutional interest.
However, crypto entrepreneur Arthur Hayes has issued a warned note, suggesting that the broader crypto market could face a “heartbreaking dump” around President-elect Donald Trump's inauguration on January 20. At the time of this publication, btc is trading at $100,099, down 0.7% in the last 24 hours.
Featured image from Unsplash.com, charts from x.com and TradingView.com
