The Bitcoin price is completing a reverse head and shoulders pattern. It looks as if it is going to break out, reaching one of the resistance areas at $7750 and $8150. However, we are still not certain if this is the beginning of a reversal or a retracement in response to the prior decrease.
Bitcoin Price Highlights
- The Bitcoin price is likely completing a reverse head and shoulders pattern.
- It is struggling to close above resistance.
- There is resistance at $7400.
- There is support at $7000.
Price Bitcoin Bounce
On November 25, the Bitcoin price reached the descending support line it has been following since June. Once it did, it created a long lower wick, similar to that on November 23. The price increased to $7400 before retracing. It reached a bullish close.
However, the Bitcoin price has struggled to close above the $7400 area. Therefore, until it does, this should be considered a retracement in response to prior decreases rather than the beginning of a reversal. This view is strengthened by the successive long upper wicks in the daily time-frame.
Reverse Head and Shoulders
Looking closer at the Bitcoin price movement, we can see the resistance and support areas at $7400 and $7000. Additionally, we can see that the Bitcoin price is likely creating a reverse head and shoulders pattern. It is currently in the process of creating the right shoulder, after which it should reach the resistance area and eventually break out.
If the Bitcoin price breaks out, the target given by the full height of the pattern is $8150. Interestingly, this is the level in which the current decrease began on November 21. Therefore, if the price reaches it, it will have retraced fully.
An intermediate target is found at $7750, which looks very likely to be hit.
For our previous analysis, click here.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Shutterstock, TradingView.
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Source: Be In Crypto