A Crypto Analyst Suggests Bitcoin May Form a Bullish Reversal Pattern
A well-known analyst believes that Bitcoin (BTC) could be on the verge of creating a pattern that might spark a resurgence in bullish momentum for the leading cryptocurrency.
Last week, when Bitcoin was trading below $40,000, an analyst named Cheds informed his large following on Twitter that BTC would show a bullish signal if it surpassed $40,500.
Following Bitcoin’s recent bounce, Cheds has updated his outlook, suggesting that Bitcoin might be forming an inverse head and shoulders pattern (I-HNS), with the new support level or right shoulder at $40,500.
The inverse head and shoulders pattern is a technical formation that indicates bullish implications, as the right shoulder indicates that bulls are willing to accumulate the asset without waiting for the price to drop to its previous low. For Bitcoin, this means the recent low of around $38,600.
Cheds’ chart analysis suggests that Bitcoin is likely to break out of the pattern if it can overcome resistance at around $42,300.
Currently, BTC is trading at $42,278.
Analyst Also Tracks Solana’s Price Action
In addition to Bitcoin, Cheds is closely monitoring the price movement of Solana (SOL), a smart contract protocol. The analyst shares a chart indicating that Solana has surpassed its short-term diagonal resistance. However, Cheds notes that SOL must convert its next resistance into support to confirm a breakout.
At the time of writing, SOL is valued at $97.16.
Hot Take: Bitcoin’s Potential Reversal Pattern
A well-known analyst suggests that Bitcoin could be forming an inverse head and shoulders pattern, which has bullish implications for the leading cryptocurrency. The analyst points out that if Bitcoin manages to break through its resistance level around $42,300, it could potentially trigger a breakout from the pattern. This pattern indicates that bulls are willing to accumulate Bitcoin without waiting for the price to drop to its previous low. The analyst is also keeping a close eye on Solana’s price action, noting that it has surpassed its short-term resistance but needs to convert the next resistance into support to confirm a breakout.
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