All eyes are on Bitcoin, and more specifically if the cryptocurrency can hold above both the "meme" downtrend line and the critical $ 10,000 level.
The asset has remained strong so far, confirming both previous resistance levels as support. But at the same time, the leading cryptocurrency in terms of market cap may have confirmed the largest reversal pattern in its history.
Has Cryptocurrency Confirmed the Largest Reverse Chart Model Ever?
Bitcoin hits $ 20,000 and immediately goes to $ 8,000. When it dropped from $ 12,000 to $ 12,000, it was clear that there was a reversal. The boom top has not yet been retested and marks the most important confirmed reversal left behind on Bitcoin's price charts so far, a full 40% move from top to bottom.
Almost exactly a year later, Bitcoin then dropped to the bottom of the current bear market to $ 3,200, consolidating for months creating another comeback model. The triangle rising at the asset's four-year low only had a full height of 30%, but it caused the cryptocurrency to rise above 300% from the lowest point of the mold.
Related Reading | Has Bitcoin Approved Retesting of "Meme" Downtrend?
Although these two reversal patterns are the two most important in the current bear and bull market cycle, they are pale in size compared to the potential reversal head and shoulders pattern that occurs over the weekly time frames on the BTCUSD price charts.
BTCUSD Weekly Inverse Head and Shoulders Confirmed Throwback | Source: TradingView
Inverted Head and Shoulders Potentially Targeting Bitcoin's New All-Time High
Since the 2019 peak, Bitcoin price action has formed what appears to be a massive inverted head and shoulders chart pattern. These structures are typically a bullish reversal pattern that represents the conflict between buyers and sellers, and sellers eventually lose substantially.
The significance of the reversal model is not just that it can hurl Bitcoin higher from here, but the size of the formation itself.
Related Reading | This Accumulation Model Shows That The Bulls Are On The Right Side Of Bitcoin
While past reversal patterns occur within only 30-40% of the price action, the full rise from the candle at the "head" of the pattern is a move above 95%. Pairing this move from the breakout point takes the cryptocurrency back to retest the old all-time high as a target.
Head and shoulder patterns, whether inverted or right-side up, often result in a reversal to retest the trendline as resistance inverted support or vice versa. Once this retest has been confirmed, the next stop is the target according to the build.
Pattern targets are taken from the trend line to the lower point of the head. Adding any wick caused by Black Thursday will move the structure's goal beyond the cryptocurrency's record price.
Could this massive model be the last reversal model before Bitcoin hit its all-time high?
Featured image from DepositPhotos, Charts from TradingView