Just below the all-time high of $69,000, Bitcoin price has shown more volatility in recent days, now hovering around $67,000. But this boredom could soon be over. Following the recent price movements, a notable pattern has emerged on the Bitcoin (BTC) price chart recognized by seasoned crypto analyst Josh Olszewicz.
Bitcoin Price Surge to $76,000 Next?
An inverse head-and-shoulders (iH&S) pattern has formed on the Bitcoin 1-hour chart, often seen as a bullish indicator, indicating potential upward price movement. This pattern, although imperfect according to Olszewicz, is considered marketable in his view. “[The] pattern is certainly not perfect, but still marketable imo,” he noted.
An Inverse Head and Shoulders (iH&S) pattern is a bullish reversal pattern in technical analysis, indicating a potential upward reversal in price trends. It consists of three troughs, the middle one being the lowest and resembling the shape of a head and two shoulders, but turned upside down.
In this scenario, Bitcoin’s chart shows the formation with a head at around $59,000 and shoulders around $65,000 and $65,700. The pattern suggests that a bullish move is underway. Traders often use iH&S patterns to identify potential buying opportunities, with entry points typically close to the breakout of the neckline.
The analyst’s chart points to a neckline (red dotted line) that slopes downward and crosses the right shoulder in the coming days. A breakout above this line is usually required to confirm the pattern. At the current price, Bitcoin is trading just below the neckline.
For traders keeping an eye on potential targets, Olszewicz’s analysis projects an ambitious target of $73,000 to $76,000, in line with the Fibonacci extension levels of 1,618 ($72,610.59) and 2 ($75,776.31). These levels represent significant price points that Bitcoin could test if the pattern is confirmed with a solid breakout.
One element that could strengthen the potential upside is a volume breakout, which the analyst has alluded to with a question mark. The volume indicator on the chart shows an upward trend, but a decisive increase in volume is typically looked for to confirm an iH&S pattern.
Additionally, Olszewicz has marked a potential stop loss (SL) level with a green dotted line. This level around $65,680 serves as a risk management tool for traders should the pattern fail to achieve the upside breakout.
At the time of writing, BTC was trading at $67,124.
Featured image created with DALL·E, chart from TradingView.com
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