Bitcoin looks bullish as it tries to overcome resistance.
- Bitcoin meets resistance but looks bullish
- A daily close above $25k points to further strength
- An inverse head and shoulders pattern suggests more dollar weakness
Can Bitcoin reach $35k? According to this reversal pattern, it can!
Bitcoin’s price action followed the US dollar lately. Naturally, volatility is higher in the cryptocurrency market, but nevertheless, the correlation is notable.
As this is the last day of the trading month, some spikes in volatility should be expected. Also, there is no NFP report this upcoming Friday because February is a shorter month than others.
Therefore, technicals will play an important role this week, and they do help Bitcoin. A reversal pattern is in the makings, and the measured move points to $35k.
Bitcoin finds resistance at $25k
Since making a double top at $65k, Bitcoin’s price fell abruptly. Only the $35k level offered some support in the first months of 2022 – and now the same area is a target for an inverse head and shoulders pattern’s measured move.
An inverse head and shoulders is a bullish pattern. It forms at the bottom of bearish trends.
Unsurprisingly, Bitcoin met resistance at the neckline, just where it found support on its way down. Bulls may want to see a clean breakthrough beyond $25k and then a sustained rally to the measured move.
Such a move would mean a lot for the cryptocurrency market and the US dollar in general. Because of the correlation mentioned earlier, if Bitcoin’s technical analysis proves correct, investors will sell the dollar in the coming months.
To sum up, Bitcoin is coiling here. Buying on a daily close above $25k with a stop at the lows and a take-profit at $35k makes sense from a risk-reward perspective.
