Bitcoin’s price has risen over 4% and is currently trading above $28,000, with a key bullish trendline forming at $27,700 on the hourly chart of the BTC/USD pair. The cryptocurrency must clear the $28,500 resistance zone to continue its upward trajectory, with potential resistance at $29,500 and $30,000. On the other hand, if Bitcoin fails to break past the $28,500 resistance, it could undergo a downside correction, with immediate support at $28,000 and major support at $27,700. The hourly MACD is losing pace in the bullish zone, while the RSI is in the overbought zone for BTC/USD.
This article originally appeared on www.newsbtc.com
Bitcoin, the world’s largest cryptocurrency by market capitalization, is once again showing signs of a bullish reversal after a prolonged period of sideways trading. The asset has recently printed a technical pattern that could signal a significant price increase in the coming weeks if certain conditions are met.
The pattern in question is known as an inverse head and shoulders, which is a bullish pattern that typically indicates a trend reversal. The pattern is formed by a low (the left shoulder), a lower low (the head), and another low (the right shoulder). The right shoulder is usually higher than the left shoulder, meaning that the pattern has an upward slope.
Bitcoin’s price printed an inverse head and shoulders pattern on the daily chart in late May and early June. The left shoulder was formed by a low of around $30,000, the head by a low of around $29,000, and the right shoulder by a low of around $31,000. The neckline of the pattern is formed by a horizontal level at around $35,000.
To confirm the pattern, Bitcoin’s price needs to break above the neckline and close above it convincingly. If this happens, traders and analysts expect the price to climb towards the pattern’s target, which is calculated by adding the distance between the head and the neckline to the neckline. In this case, the target would be around $39,000.
However, a close above $28,500 is critical for this bullish scenario to play out. This level has been a strong resistance level for Bitcoin since the market-wide crash in May 2021. If the price fails to break above this level, the bullish pattern would be invalidated, and the price could drift lower.
On the other hand, a close above $28,500 and a break of the neckline would signal a bullish trend reversal for Bitcoin, which could trigger a new wave of buying from traders and investors. Bitcoin’s price could rise towards its recent highs of around $42,000 and potentially even higher.
In conclusion, Bitcoin’s recent price action suggests that the asset could be in for a bullish reversal. The inverse head and shoulders pattern that has formed on the daily chart is a bullish technical indicator, but a close above $28,500 and a convincing breakout of the neckline are critical for the pattern to play out. With Bitcoin’s price showing strength in recent weeks, many traders and investors are cautiously optimistic about the asset’s future.
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