Bitcoin’s Potential Head and Shoulders Pattern Could Lead to a Dip to $75K: Analyst Cautions
Bitcoin (BTC) has recently experienced a pullback, raising concerns that the cryptocurrency may be forming a bearish “head and shoulders” (H&S) pattern, which could signal a significant drop to the $75,000 level.
After climbing over 50% since early November, bitcoin’s price action has shown signs of developing a typical head and shoulders pattern, often associated with trend reversals. The initial peak, referred to as the “left shoulder,” occurred when bitcoin struggled to break through the $100,000 mark in November.
Following that, the “head” formed when bitcoin reached an all-time high above $108,000 in December, only to experience a sharp decline to around $92,000. The most recent drop to near $97,000 is now shaping what could be the “right shoulder.”
If the price falls below the neckline—the horizontal line connecting the two troughs of the shoulders—this would confirm the completion of the head and shoulders pattern. As of now, the neckline support is seen around $91,500. A decisive break below this level would likely trigger a move toward the $75,000 range, as the measured move technique suggests a potential downside based on the distance from the head to the neckline.
While technical analysis provides valuable insights into potential price movements, traders should be cautious when trading patterns like these. A head and shoulders formation can fail, leading to unexpected price movements, and traders may find themselves on the wrong side of the market.
