If confirmed the upside breakout PT will be $49k, currently near neckline now. Nearly all major coins are printing this same pattern on 1H candles atm.
This pattern typically plays out after a selloff as well. Here's the technical definition:
The inverse head and shoulders pattern begins with a downtrend. This is the extended move down that eventually leads to exhaustion and a reversal higher as sellers exit and buyers step up. That downtrend is met by minor support, which forms the first shoulder. As the market begins to move higher, it bounces off of strong resistance and the downtrend resumes. This resistance level forms what is called the neckline.
After the market makes a lower low, it finds strong support which forms the head of the pattern. The market finds resistance at the neckline once more, which forms the second shoulder. At this point the inverse head and shoulders is taking shape but the pattern isn’t confirmed just yet.
The Breakout
One area where a lot of traders go wrong is thinking that the pattern is confirmed as soon as the second shoulder forms. Although the pattern begins taking shape at this stage, it isn’t confirmed until the market closes above neckline resistance.
This pattern typically plays out after a selloff as well. Here's the technical definition:
The inverse head and shoulders pattern begins with a downtrend. This is the extended move down that eventually leads to exhaustion and a reversal higher as sellers exit and buyers step up. That downtrend is met by minor support, which forms the first shoulder. As the market begins to move higher, it bounces off of strong resistance and the downtrend resumes. This resistance level forms what is called the neckline.
After the market makes a lower low, it finds strong support which forms the head of the pattern. The market finds resistance at the neckline once more, which forms the second shoulder. At this point the inverse head and shoulders is taking shape but the pattern isn’t confirmed just yet.
The Breakout
One area where a lot of traders go wrong is thinking that the pattern is confirmed as soon as the second shoulder forms. Although the pattern begins taking shape at this stage, it isn’t confirmed until the market closes above neckline resistance.
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