Just below the all-time high of $69,000, the Bitcoin price has shown more volatility in recent days, only to now tread water around $67,000. But this boredom could soon be over. Following the recent price movements, a notable pattern has emerged on the Bitcoin (BTC) price chart, as recognized by the seasoned crypto analyst Josh Olszewicz.
Bitcoin Price Rallye To $76,000 Next?
An inverse head and shoulders (iH&S) pattern, often seen as a bullish indicator, has formed on the Bitcoin 1-hour chart, suggesting a potential upward price movement. This pattern, while admittedly imperfect as per Olszewicz, is considered tradeable in his view. “[The] pattern is definitely not perfect but still tradeable imo,” he remarked.
Related Reading: The $69,000 Bitcoin Question: Expert Forecasts When Price Will Breakout
An Inverse Head and Shoulders (iH&S) pattern is a bullish reversal pattern in technical analysis, signaling a potential upward reversal in price trends. It consists of three troughs with the middle trough being the lowest, resembling the shape of a head and two shoulders, but flipped upside down.
In this scenario, Bitcoin’s chart shows the formation with a head at approximately $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 (dotted red line) slanting downward, intersecting with the right shoulder in the coming days. A breakout above this line is typically required to confirm the pattern. At the current price, Bitcoin is trading just below the neckline.
Related Reading: Bitcoin’s Crucial Lifeline: Analyst Unveils Support That Could Prevent Crash To $60K
For traders eyeing potential targets, Olszewicz’s analysis projects an ambitious goal of $73,000 to $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 might test if the pattern is confirmed with a solid breakout.
One element that could fortify the potential upward journey is a volume breakout, which the analyst has hinted at with a question mark. The volume indicator on the chart shows an increasing trend, but a decisive surge in volume is typically sought after to confirm an iH&S pattern.
Moreover, Olszewicz has marked a potential stop loss (SL) level with a dashed green line. This level around $65,680 serves as a risk management tool for traders should the pattern fail to realize the upward breakout.
At press time, BTC traded at $67,124.
Featured image created with DALL·E, chart from TradingView.com
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