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Bitcoin Head and Shoulder Pattern Forming?
Good morning traders and crypto enthusiasts! At least morning is here in Tbilisi, Georgia
This morning when checking my crypto charts I noticed a possible head and shoulder pattern forming on the Bitcoin chart. A possible trend reversal?
A head and shoulders pattern is used in technical analysis. It is a specific chart formation that predicts a bullish-to-bearish trend reversal. The pattern appears as a baseline with three peaks, where the outside two are close in height, and the middle is the highest.
Although the above picture doesn’t reflect a perfect head and shoulders pattern, it looks Bitcoin might enter into a consolidation period for the upcoming few weeks, before dipping under its 50-day moving average price, at the moment $26,750.
A possible move back to $20,000 afterward wouldn’t be a surprise.
Anyhow, just a guess, a more thorough analysis would be required before taking a trade decision.
At the moment I'm not trading Bitcoin, instead, I trade call and put options with Ethereum on the Deribit platform. Any price movement in Bitcoin also reflects back to Ethereum (and most of the rest altcoins).
Currently holding 1 call option on ETH with a strike price $2,000 and expiry on June 30, 2023. As long as ETH stays under $2,000 in short term I'm happy! Less trade adjustments needed.
Enjoy your Friday!