Inverted Head and Shoulders Pointing to a Bullish BTC Breakout
As I carefully analyzed the BTCUSDT 4-hour chart, an intriguing pattern caught my attention. The formation of an inverted head and shoulders pattern, often a precursor to a bullish reversal, suggests a strong upward momentum may soon be upon us. The left shoulder and head have already been defined, with the right shoulder currently in formation. My eye is drawn to the neckline, a critical threshold, which if breached could catapult BTC towards my target of approximately $75,850.
This target is derived by projecting the vertical distance from the head to the neckline upward from the breakout point. It's important to note that the volume is increasing on the right shoulder, reinforcing the potential for an upward breakout. The historical resistance zones, marked by the All-Time High (ATH) and the Previous Cycle ATH, serve as my signposts for gauging the breakout's success. My trading plan includes a decisive close above the neckline with considerable volume before considering a long position to capitalize on this anticipated ascent.
The downward sloping neckline on my chart got me pondering about its significance for the pattern's reliability. Typically, a horizontal or upward sloping neckline is seen as more conventional for a head and shoulders pattern, offering a clearer breakout signal. This atypical slope has me slightly concerned; it might indicate a weaker bullish scenario or a less predictable market response upon the pattern's completion. Still, the pattern holds potential, but I'll be watching closely for confirmation of the trend reversal before making any moves.
This target is derived by projecting the vertical distance from the head to the neckline upward from the breakout point. It's important to note that the volume is increasing on the right shoulder, reinforcing the potential for an upward breakout. The historical resistance zones, marked by the All-Time High (ATH) and the Previous Cycle ATH, serve as my signposts for gauging the breakout's success. My trading plan includes a decisive close above the neckline with considerable volume before considering a long position to capitalize on this anticipated ascent.
The downward sloping neckline on my chart got me pondering about its significance for the pattern's reliability. Typically, a horizontal or upward sloping neckline is seen as more conventional for a head and shoulders pattern, offering a clearer breakout signal. This atypical slope has me slightly concerned; it might indicate a weaker bullish scenario or a less predictable market response upon the pattern's completion. Still, the pattern holds potential, but I'll be watching closely for confirmation of the trend reversal before making any moves.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.