Alex Dovbnya
In a promising development for Bitcoin investors, the leading cryptocurrency has formed an inverted head and shoulders pattern on the daily chart
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Bitcoin's price chart shows a classic bullish pattern that could indicate a possible uptrend.
Market analyst Jake Wujastyk highlighted the formation of an inverted head and shoulders pattern on the daily candlestick chart. This coincided with price closing above a key volume level.
A bullish pattern
An inverted head and shoulders pattern is often considered a predictor of a market reversal from a downtrend to an uptrend. The map shows two lower peaks, called shoulders, flanking a deeper valley called the head.
This pattern is completed when price breaks out above the resistance level that forms the “neckline,” which in this case coincides with the volume shelf – a price level with a high number of previously traded contracts, indicating strong support or resistance.
The recent close above this critical level at around $43,000 suggests that buyers could take control and push Bitcoin price higher in the near term.
A massive options expiry
Current Bitcoin price action suggests cautious optimism as the market digests the upcoming 22,000 BTC options expiry.
The Maxpain point at which most options would expire worthless is $42,000, just below current trading levels, suggesting a potential support area.
The notional value of these options is a significant $960 million, underscoring the importance of this event for market sentiment.
This week the cryptocurrency market has been relatively flat, with realized volatility (RV) and implied volatility (IV) trending lower on key terms, indicating a period of consolidation.
Despite the calm market, Bitcoin spot exchange-traded funds (ETFs) are gradually attracting increasing capital inflows, a bullish indicator for the cryptocurrency. Conversely, some large traders or “whales” have reduced their positions, suggesting a mix of profit-taking and strategic rebalancing.
About the author
Alex Dovbnya
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience reporting on everything related to the emerging industry – from price analysis to blockchain disruption. Alex has written more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He is particularly interested in the regulatory trends around the globe that are shaping the future of digital assets. He can be contacted at [email protected].
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
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