Bitcoin Very Bullish Reversal Signal. Awaiting Confirmation.
Inverse head and shoulder patterns are one of the most bullish reversal patterns in technical analysis - when they confirm. Until they confirm, they are actually a bearish pattern.
The neckline of the inverse head and shoulders (thick green line) is STRONG resistance until it is broken. If you look at the history of inverse head and shoulder patterns like this for Bitcoin during this bear downtrend, you will see most of them formed but didn't confirm by breaking above the neckline.
It is important that you do NOT anticipate the completion of the inverse head and shoulder pattern by buying before it confirms. I would wait for the day to close above 6,900 before entering a trade. Not only is there strong resistance at the neckline, there is also strong resistance at 6,860 where BTC's price already retreated twice (local double top).
If the inverse head and shoulder pattern confirms with a day close above $6,900, then the target becomes 15% from the neckline. This target is derived by the height of the head to the neckline as shown in the graph above.
The neckline of the inverse head and shoulders (thick green line) is STRONG resistance until it is broken. If you look at the history of inverse head and shoulder patterns like this for Bitcoin during this bear downtrend, you will see most of them formed but didn't confirm by breaking above the neckline.
It is important that you do NOT anticipate the completion of the inverse head and shoulder pattern by buying before it confirms. I would wait for the day to close above 6,900 before entering a trade. Not only is there strong resistance at the neckline, there is also strong resistance at 6,860 where BTC's price already retreated twice (local double top).
If the inverse head and shoulder pattern confirms with a day close above $6,900, then the target becomes 15% from the neckline. This target is derived by the height of the head to the neckline as shown in the graph above.
Trade closed: target reached:
Target reached.
My goal is to find the best risk:reward setups. For instance, if you risk $1,000 at a chance to make $5,000, you can afford to be wrong 4 out of 5 times and still not lose money. I hit my targets over 50% of the time.