Crypto analysts emphasized earlier this week about the potential formation of a head and shoulders pattern (H&S) forming on the Bitcoin chart. If this textbook scenario occurs, the Bitcoin price could rise to $ 14,000 by July this year.
Weekly BTC / USD chart | Source: TradingView
Bitcoin's recent price action has made it part of an inverted head and shoulders pattern. This pattern is formed by 3 low levels, with the middle level being the lowest. So far, bitcoin has made two lows (the left shoulder and the top of the model). However, it has not yet completed the pattern by creating a third bottom, and then a bounce towards the neckline.
This means that Bitcoin can still fall to the lows established by the left shoulder. The fall can start from the current level, or the overhead resistance level and is completed when it reaches the zone of $ 7,800-8,054. Here, Bitcoin will attract more buyers, and result in a retrograde retreat to the neckline of the head and shoulders pattern at $ 10,190.
H&S model breakthroughs often push prices up to the height of the model. In the current case, that height is about $ 4,000. Therefore, if the bulls can push the price above the neckline, then it is possible for Bitcoin to rise to $ 14,000.
Combo Halving – corona virus
Bitcoin price has recently increased by nearly 9% after a strong press release. This could be because speculators are increasing their long position in bitcoin, believing it will protect them from the financial crisis caused by the corona virus pandemic that is escalating worldwide. .
After the global stock market crash, investors are pumping their money into safe-haven assets. Last Friday, FT had report that investors withdrew about $ 23 billion in equity to seek security in bonds, gold and similar hedging assets.
And many have long predicted Bitcoin to be a crisis management asset, since it lacks correlation with traditional markets. Moreover, the halving event, which took place in May 2020, will cause the daily Bitcoin supply to drop from 1,800 BTC to 900 BTC, and it is like an event that will help Bitcoin continue to rise due to the supply and demand gap. .
So I think May 2020 #bitcoin halving will produce similar results (red dots) as 2012 and 2016 halving. Why? Co-integration! ELI5: S2F and btc price stay together. Look at the white dots (1 means btc price is exactly S2F model value), btc is above and below model value EVERY YEAR. pic.twitter.com/kfrejvrRA2
– PlanB (@ 100trillionUSD) March 4, 2020
"I think the Bitcoin halving event in May will produce the same results (red dots) as the halving event in 2012 and 2016. Why? Co-operate! ELI5: S2F indicator and btc price are together. Looking at the white dots (1 means the btc price is exactly the S2F model value), btc is above and below the model value line every year. "
Risk
Weekly BTC / USD chart | Source: TradingView
On the downside, the bitcoin uptrend seems to slow down to near $ 9,000, which could cause cryptocurrencies to test new short-term lows. Its biggest challenge is maintaining the price above the 50-week MA. Because a break below this MA line could drop the Bitcoin price to the range of $ 6,400-6,000.
You can see the price of BTC here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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