Veteran trader Peter Brandt has identified a possible head and shoulders (H&S) pattern in Bitcoin's (BTC) daily time frame charts. An H&S pattern is a technical trading signal that typically indicates a reversal in trend, from being bullish to bearish. A complete H&S formation can be graphically identified by three peaks in the chart - with the middle peak (the “head”) being the highest and the other two peaks (the “shoulders”) lower and roughly equal in height. The confirmation of the H&S pattern happens when the price breaks below the support found at the neckline of the shoulders.

In BTC's chart, the left shoulder seemed to form when the Cryptocurrency broke out from the $20,000 price in February to peak between $26,000 and $28,000 in March. By early April, it reached its peak at the high of $31,000. The formation of the potential H&S pattern appeared to be complete when BTC recovered from a sharp dip between April 19th and 24th.

It's important to remember that not all H&S patterns are accurate. As with any trading signal, additional confirmation is needed. Inaccuracies can occur in the form of false breakouts and whipsaws. At the time of writing, BTC is trading at $27,384 with a price decrease of 1% in the past 24 hours and 5.92% in the past 7 days.

If the H&S pattern is accurate, it could signal the end of the current rally in BTC. But, investors should remember that widespread adoption of the digital asset alone could be driving the prices up and even if the trend reverses the price of BTC could remain stable - or increase - if there is significant investment in the asset.



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