Wednesday, November 27, 2019 3:00 PM EDT
After suffering weeks of losses, the outlook for Bitcoin may have just turned bullish with the formation of an inverse head and shoulders pattern. Employing a band of support from May as the neckline, brief probes beneath $7,000 have created two shoulders and a head – creating an almost textbook formation of the bullish indicator. Since inverse head and shoulder patterns typically denote a bottom, Bitcoin could enjoy a brief respite from its longer-term downtrend, but it becomes a question of how far, and for how long, Bitcoin bulls will push the cryptocurrency – if at all.
BITCOIN PRICE CHART: 4 - HOUR TIME FRAME (NOVEMBER 11 – NOVEMBER 27) (CHART 1)
(Click on image to enlarge)
Given the distance between the top of the neckline and the head, it could be argued the formation may drive Bitcoin as high as $8,100 – but this is far from certain. Further still, traders typically look for a surge in volume to accompany the initial break above the neckline, an aspect that could have been stronger in this particular instance. Still, amidst a bleak outlook, the formation should be a welcome sign for believers in the largest cryptocurrency by market cap.
That being said, I still maintain my bearish bias for the coin’s medium-term outlook. To that end, Bitcoin’s presence beneath support that I previously highlighted at $7,000 and $6,500 – albeit brief – speaks to the continued strength of bears.
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The recent volatility with #Bitcoin has really been turning me again #cryptos. $BITCOMP