Is Bitcoins head-and-shoulders pattern hinting at an imminent bounce and a new bull run?A much-anticipated Bitcoin rebound may be on the horizon as the largest cryptocurrency has formed a head-and-shoulders pattern a bullish technical indicator suggesting a potential upside breakout. The formation of this pattern, coupled with the increasing market optimism and improving market sentiment, could fuel the next rally for BTC
Is Bitcoins head-and-shoulders pattern hinting at an imminent bounce and a new bull run?
A much-anticipated Bitcoin rebound may be on the horizon as the largest cryptocurrency has formed a head-and-shoulders pattern a bullish technical indicator suggesting a potential upside breakout. The formation of this pattern, coupled with the increasing market optimism and improving market sentiment, could fuel the next rally for BTC.
Head-and-shoulders pattern triggers Bitcoin upside breakout
Market analyst and CryptoBanter host Kyle Doops pointed out that the head-and-shoulders pattern emerging on the Bitcoin chart had caught the attention of crypto enthusiasts, fueling speculations of a significant price surge for BTC in the near term. The head-and-shoulders pattern signals an end to the downtrend, indicating that Bitcoin might be gearing up for a potential price breakout, marking a definitive end to the current consolidation phase.
According to the market analyst, BTC has been forming a head-and-shoulders pattern against the S&P 500 (SPX) for over two-and-a-half years, suggesting a bullish move in the near term. Kyle Doops pointed out that the current development of the right shoulder signals that there has not been a real Bitcoin bull market in the past 3.5 years. Moreover, the flagship crypto assets returns against SPX have not changed since 2021. Considering these developments, the market analyst is bullish on the short-term and long-term prospects for BTC as he anticipates a breakout starting in Q4 this year, potentially triggering a real bull market against traditional markets.
On-chain price metrics suggest growing market confidence
The analyst further pointed out that Bitcoins price is on the verge of a surge based on the on-chain price metrics of short-term and long-term holders. This metric shows the average price at which different categories of holders bought and sold BTC, currently indicating growing market confidence. Kyle Doops highlighted that the short-term holder realization price had officially broken through a 3-month resistance, indicating that Bitcoin might be on the verge of a surge.
However, consolidation is crucial to validate this trend reversal. As such, the expert stressed that $62,000 is a critical support level for investors to keep an eye on, whereas the peak of the rally could add demand and confidence to help them weather a volatile market.
Is BTCs strength weakening?
Today, BTC suffered a dip, falling from $64,000 to $62,500. However, the crypto asset is gradually experiencing an upward trend, recovering to the $63,800 price point.
At press time, BTC has rebounded to $63,828, indicating a mere 0.07% gain from the past day. The coin has gained about 2.77% and 1.48% over the longer time frame, 7 days and 1-month, respectively.
However, the trading volume to market cap ratio of BTC presents a worrisome trend, declining by over 17% and 0.01% respectively, for the past day, according to CoinMarketCap.
Conclusion
The emergence of the Bitcoin head-and-shoulders pattern and positive signals from on-chain price metrics all point towards an imminent rebound for BTC. Despite some recent volatility, market analysts remain confident in the short-term and long-term prospects for BTC. Investors should keep a close eye on the critical support level of $62,000 and look forward to a potential breakout.
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