After stalling for a second time above $25,000, the price of a #bitcoin is again back above $27,000.
Bulls may eventually reverse the downtrend with a strong, methodical rise to $42,000 if price rejects support and makes another drive at resistance.
Analyzing 2023 Again using Traditional Techniques of Technical Analysis
Bitcoin's price has been relatively flat so far in 2023. The year started with a significant upswing from the bear market lows, but it was not enough to inspire widespread optimism for its immediate continuance. However, not even an inverted head-and-shoulders pattern has reached its upward aim.
However, BTCUSD has spent a considerable amount of time consolidating, failing to either rise over $31,000 or fall below $25,000. With the leading cryptocurrency once again finding safety at $25,000, buyers may feel more confident.
Traditional charting techniques, such as the inverse head and shoulders neckline support and a straightforward downtrend line, can help us piece together a technical rationale for the halt in this region.
Comparison of Two Tests and a $42,000 Goal
Price often retraces to the pattern's neckline resistance after forming an inverted head and shoulders pattern. Those who bought early may now sell at a profit, while new purchasers can join in at cheaper prices.
Following a retest, Bitcoin made a significant upward surge, shattering a downtrend line derived from previous highs. Bitcoin retraced below $25,000 to re-test the downtrend line it had broken out from, but this time the confidence was there for proper follow through.
Now that the level has been challenged twice and held both times, bulls may have enough confidence to push prices to the upside, completing the inverted head and shoulders pattern. The price of Bitcoin at this point in time is $42,000.