Bitcoin Head and Shoulders Incoming?
While the chart pattern has a way to go, it's interesting to look at what may happen if the chart pattern completes.
We often think of the height of the head-and-shoulders pattern as significant as a predictor of the size of the drawdown that could occur if the trend reversal takes place. In this case, that size is about 55%. So, if it plays out according to textbook patterns, we would expect:
* A retest of 50k which is rejected
* A quick return to the 30k level
* A prolonged downtrend that culminates with a capitulation at around $13,500
Not all head-and-shoulders patterns play out to completion, and many don't fully reach their target price even if directionally accurate, and this pattern is still developing. So time will tell, but it's just another thing to watch to help contextualize where the market is in terms of the greed-fear cycle.
We often think of the height of the head-and-shoulders pattern as significant as a predictor of the size of the drawdown that could occur if the trend reversal takes place. In this case, that size is about 55%. So, if it plays out according to textbook patterns, we would expect:
* A retest of 50k which is rejected
* A quick return to the 30k level
* A prolonged downtrend that culminates with a capitulation at around $13,500
Not all head-and-shoulders patterns play out to completion, and many don't fully reach their target price even if directionally accurate, and this pattern is still developing. So time will tell, but it's just another thing to watch to help contextualize where the market is in terms of the greed-fear cycle.
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.