Bitcoin - Inverted Head and Shoulders Trade
Updated
Bitcoin has had quite a nice pullback in the last few days, I noted the weekly doji candle pattern prior to the move, the pullback was not quite as deep as i anticipated ($9,200 USD vs a realised $9,500 USD drop) however, the recent bounce off support (mid point of the Keltner channel (20 ma) has painted a possible inverted head and shoulders, prominent on the 4hr time frame.
This would suggest that a slight move lower to form the right shoulder is in the cards at press time, likely a move around the $11,000 USD mark, the prior support also offers a clue as to the potential bounce point. Assuming the pattern plays out, if it fails to then this analysis is void.
A subsequent rise from this right shoulder above $12,000 USD could signal a move (measured from the Head and Shoulders pattern) to around the $14,000 USD level, certainly a retest of near terms highs (prior to the pullback) is on the cards.
Stay aware of this potential pattern and watch how it develops, as it may very well have a near term effect on price action, should it play out.
- Stay disciplined
This would suggest that a slight move lower to form the right shoulder is in the cards at press time, likely a move around the $11,000 USD mark, the prior support also offers a clue as to the potential bounce point. Assuming the pattern plays out, if it fails to then this analysis is void.
A subsequent rise from this right shoulder above $12,000 USD could signal a move (measured from the Head and Shoulders pattern) to around the $14,000 USD level, certainly a retest of near terms highs (prior to the pullback) is on the cards.
Stay aware of this potential pattern and watch how it develops, as it may very well have a near term effect on price action, should it play out.
- Stay disciplined
Note
Bitcoin seems to be respecting this inverted head and shoulders, there may be some more downside potential, however we have already touched the 20 ma.Watch for a potential bounce, but be aware that more downside is entirely possible.
The take away is that Bitcoin appears to be playing out this inverted head and shoulders.
tradingview.com/chart/eYKGzRoI/
Note
Watch for a move into the orange resistance band, a convincing break above would signal that the inverted head and shoulders pattern has played out, in which case a move to 14,000 USD is not out of the question.Note
Bitcoin has seen some resistance at the $11,700 USD mark, watch closely for a move below $10,800 USD (bottom of hypothetical right shoulder).As this could invalidate this pattern.
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