Bitcoin (BTC) surpassed the psychologically important price level of $100,000 yesterday, sparking optimism among bulls that the digital asset could continue its upward momentum and achieve all-time highs (ATH) in the coming weeks.
Is the head and shoulder pattern doomed to fail?
As Bitcoin regains a key price level, speculation about its future price path has intensified. Analysts are closely monitoring bearish chart patterns for the possibility of them being invalidated, which could indicate a continuation of the uptrend.
One such bearish formation is the head and shoulders pattern on the daily chart, which received a lot of attention throughout December. This pattern is seen as a potential signal that Bitcoin may see a sharp correction to the mid-$70,000 range.
For starters, a head and shoulders pattern is a bearish chart formation that indicates a potential reversal from an uptrend to a downtrend. It is characterized by three peaks, the middle peak being the highest, known as the “head”, surrounded by two lower peaks called the “shoulders”, and a neckline that acts as a crucial support level. A break below the neckline confirms this downtrend.
However, as Bitcoin surpassed $100,000, the probability of the head and shoulders pattern materializing diminished. According to cryptocurrency analyst Axel Kibar, current market trends indicate that a bearish scenario may fail to materialize. Kibar explained:
Bitcoin against the dollar On the daily scale, a top similar to the head and shoulders has been formed. The price is now challenging the potential right shoulder top. A breakout can cause the pattern to be rejected and should be considered bullish. The price target for Head and Shoulders Failure stands at 116K.
Kibar also noted that even if the head and shoulders pattern continues and Bitcoin falls to $73,800, that may still not disrupt the broader uptrend. Such a bounce would likely be a pullback to the previous ATH test around $73,000 as a new support level.
It should be noted that since surpassing the ATH in March 2024, Bitcoin has not seen a significant decline, except for the sudden collapse to $90,500 on December 4. Bull markets are typically characterized by sharp price declines followed by a quick recovery, paving the way for the next leg higher.
Bitcoin price predictions for 2025
Bitcoin price forecasts in 2025 are still very bullish. For example, cryptocurrency analyst Jason A. Williams He predicts That BTC could reach $131,500 by the first quarter of 2025.
Likewise, said Jeff Kendrick, an analyst at Standard Chartered Bank imagine Bitcoin rises 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 issued warning note, suggesting that the broader cryptocurrency market could face a “horrific dump” ahead of President-elect Donald Trump’s inauguration on January 20. At press time, Bitcoin is trading at $10,0099, down 0.7% over the past 24 hours.
Featured image from Unsplash.com, charts from X.com and TradingView.com
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