TradingShot

BITCOIN Inverse Head and Shoulders and Market Phases

Long
BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
Following the strong pull back of the recent days (to the 0.618 Fibonacci retracement as explained on this study/ link), I am making a quick update on the new pattern that is emerging on Bitcoin: the Inverse Head and Shoulders .

This is also in response to the idea presented by BTSE exchange on the symmetry of the Channel Down:


I want to tackle BTSE's (otherwise correct technically) notion on the symmetry of that Channel Down pattern with one on a wider timeframe which shows that the whole picture since October could be a big Inverse Head and Shoulders .

** The Inverse Head and Shoulders **
The Inverse Head and Shoulders is a typical formation that indicates a trend change and on BTC in particular, it could indicate the trend shift from the ( bearish ) Channel Down that started with the June 2019 $13800 top, to the ( bullish ) pattern that will lead Bitcoin after the Halving/ link and towards the 2019 high at the end of the year. The Tops have been both symmetrical on the $10500 Resistance (October 26, 2019 and February 13, 2020) and it remains to be seen if the Bottoms (Left and Right Shoulder respectively), will also be symmetrical within the $7700 - 7300 Support zone (consisting of the lows made on September 30, 2019 and October 22, 2019). The Head of the formation is of course the $6500 low of December 18, 2019.


** The Phases: Bearish , Transition, Bullish **
Now since the Inverse Head and Shoulders pattern is a trend change formation, it is important to understand how the market is shifting within this paradigm. For that reason I have divided the price action into three phases which start from the June $13800 top and end at the end of 2020, with key dividers in between the $6500 bottom and the May 11 Halving.

I have already mentioned the Channel Down that started with the June Top and ended with the December Bottom. This is practically the "Bearish Phase". The one that follows (and we are currently at) is the "Transition Phase" which contains the second part of the Inverse Head and Shoulders (which as mentioned is the transition mechanism) and ends on the May Halving. Where does this phase transitions to? The "Bullish Phase" which after the Supply Shock that the Halving will provide, should lead Bitcoin to a bullish yearly finish for 2020 (I have set a near $20000 target on this study/ link).

It is also interesting to point out that on this 1D chart, the Death Cross (red pin note on October 25 2019) and the Golden Cross (green pin note on February 17 2020) took place roughly on the market Tops ($10500 Resistance). Symmetry of the Inverse Head and Shoulders at its best! As I said earlier lets see if the Symmetrical Bottom of the Shoulders is also respected.

I hope you enjoyed today's study. As always feel free to engage this with your opinion. Do you think the Inverse Head and Shoulders bottom will hold or we are looking at a total retrace back to the $6500 bottom? Share your work and let me know in the comments section!

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Comments

This is definitely not an inverse head and shoulder. It's too wide out to be one. Check the rules on how to draw head and shoulders patterns.
+31 Reply
BeingCryptic UnknownUnicorn1866407
@UnknownUnicorn1866407,

It's a very clear Inverse H & S. Not sure how you've concluded that a "too wide out" makes the pattern invalid.

+6 Reply
Supdolt BeingCryptic
@BeingCryptic, bitcoin follows the global market, people needs fiat now its time to sell.
+12 Reply
@Supdolt,

I think it would be foolish to sell now. This point so critical before a massive run to 20k.

If Bitcoin followed traditional stocks it would have crashed around the same time.
+7 Reply
arnnye27 BeingCryptic
@BeingCryptic, Exactly...selling now at the bottom of correction is insane. Can rebound anytime from now .
+6 Reply
deepstats1 arnnye27
@arnnye27, Wrong
Reply
bittuminati arnnye27
@arnnye27, It will take months for the actual rebound.
Reply
amalcev BeingCryptic
@BeingCryptic, it just did it
+1 Reply
eatmagnetic BeingCryptic
+1 Reply
substance90 BeingCryptic
@BeingCryptic, how's that working out for you?
+5 Reply
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