Bitcoin Review: Inverted Head And Shoulder Pattern Developing

Published 03/10/2019, 12:53 AM
Updated 07/09/2023, 06:31 AM

It's a safe bet that most trading desks see an inverted head and shoulder pattern developing in Bitcoin. That interpretation can be accomplished by reading one technical analysis book. It's not to say a bullish resolution is not possible, but there's more going on in bitcoin analysis price and volume of the daily trend.

For starters, Bitcoin's trend is a composite of multiple, really infinite, fractal trends. We don't need to study them all - only 3 or 4 to develop the composite trend. The current inverted head and shoulders pattern doesn't even exist in the month or quarter charts.

Next, the flow of time is extremely important. This concept is left out of most TA books. Bitcoin is rallying because the weekly, secondary trend needs a reset; the cycle of time is extremely extended. What happens after the reset? We'll see. A downside resolution, however, is more a favorable outcome than a runaway rally to the upside. Why? The primary trend is still down and relatively young. This observation must be framed within the flow of leverage which the Matrix defines as distribution during consolidation or what many see as a rally. Distribution or accumulation is defined by DI (line 38, column J).

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.