A closely followed analyst thinks that Bitcoin (BTC) may be in the process of creating a pattern that could reignite bullish momentum for the crypto king.
Last week when Bitcoin was trading below $40,000, pseudonymous analyst Cheds told his 322,600 followers on the social media platform X that BTC would flash a bullish signal if it moved above $40,500.
With BTC’s latest bounce, Cheds updates his outlook, saying that Bitcoin could be printing an inverse head and shoulders pattern (I-HNS) with $40,500 serving as the new support or the right shoulder.
“BTC see if we throwback or breakthrough. Could see I-HNS (inverse head and shoulders) perhaps.”
An inverse head and shoulders pattern is a technical formation with bullish implications as the right shoulder suggests that bulls are willing to accumulate the asset without waiting for the price to drop to its previous low. In Bitcoin’s case, the last week’s low stands at around $38,600.
Looking at the trader’s chart, he seems to predict that Bitcoin would break out of the pattern if BTC manages to take out its resistance around $42,300.
At time of writing, BTC is trading at $42,278.
The crypto strategist is also keeping a close watch on the price action of the smart contract protocol Solana (SOL). The analyst shares a chart suggesting Solana has taken out its short-term diagonal resistance. However, the trader highlights that SOL must convert its next resistance into support to confirm a breakout.
“SOL update.
$103 flip would confirm [breakout].”
At time of writing, SOL is worth $97.16.
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Source: https://dailyhodl.com/2024/01/29/bitcoin-could-form-a-bullish-reversal-pattern-after-btcs-recapture-of-40500-according-to-crypto-analyst/