Bitcoin (BTC) crossed the psychologically significant $100,000 price level yesterday, fuelling optimism among bulls that the digital asset could continue its upward momentum and achieve new all-time highs (ATH) in the coming weeks.
Head-And-Shoulder Pattern Bound To Fail?
With Bitcoin reclaiming a key price level, speculation about its future price trajectory has intensified. Analysts are closely monitoring bearish chart patterns for potential invalidation, which could signal a continuation of the bullish trend.
One such bearish formation is the head-and-shoulders pattern on the daily chart, which garnered significant attention throughout December. This pattern was seen as a possible signal that Bitcoin might experience a sharp correction to the mid-$70,000 range.
For the uninitiated, a head and shoulders pattern is a bearish chart formation that indicates a possible reversal from an uptrend to a downtrend. It features three peaks with the middle peak as the highest, known as the “head,” flanked by two lower peaks called “shoulders,” and a neckline acting as a critical support level. A break below this neckline confirms the bearish trend.
However, with Bitcoin surpassing $100,000, the probability of the head-and-shoulders pattern materializing has diminished. According to crypto analyst Aksel Kibar, current market trends suggest the bearish scenario may fail to unfold. Kibar explained:
BTCUSD On daily scale formed a similar head-and-shoulders top. Price is now challenging the high of the possible right shoulder. Breach can result in a pattern negation and should be considered bullish. Head-and-shoulders failure price target stands at 116K.
Kibar also noted that even if the head-and-shoulders pattern plays out and Bitcoin drops to $73,800, it might still not disrupt the broader bullish trend. Such a retracement would likely serve as a pullback to test the previous ATH around $73,000 as a new support level.
It is worth noting that since surpassing its March 2024 ATH, Bitcoin has not experienced a major pullback, aside from a flash crash to $90,500 on December 4. Typically, bull markets are characterized by steep price declines followed by rapid recoveries, setting the stage for the next leg upward.
Bitcoin Price Projections For 2025
Price forecasts for Bitcoin in 2025 remain overwhelmingly bullish. For instance, crypto analyst Jason A. Williams predicts that BTC could reach $131,500 by the first quarter of 2025.
Similarly, Standard Chartered analyst Geoff Kendrick envisions Bitcoin climbing to $200,000 by the end of 2025, driven by factors such as strategic Bitcoin reserves and increasing institutional interest.
However, crypto entrepreneur Arthur Hayes has issued a cautionary note, suggesting that the wider crypto market might face a “harrowing dump” around President-elect Donald Trump’s inauguration on January 20. At press time, BTC trades at $100,099, down 0.7% in the past 24 hours.
Featured Image from Unsplash.com, Charts from X.com and TradingView.com
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