Hello traders,
Here we see the 2 hour chart of Bitcoin and a confirmed head shoulders pattern.
Target of the H-S formation is 37,000 usd. The neckline has already been retested as we saw already in my other charts. We also have higher volume in the right shoulder of the H-S formation which makes the pattern much more reliable.
Interestingly, we now see the also the development of a bullish falling wedge . Target seems to me 42,000 usd ( the tip) if price continues the downtrend while the H-S formation has a target of 37,000 usd.
These levels are also important horizontal key support levels which make it even more important!
How can we capitalize on this development? All patterns can fail so always think one step ahead. New patterns are continuously formed and as a trader you best adapt to this.
Specifically now we have 2 targets, 42.000 and 37.000 usd. If the price of Bitcoin breaks out of the falling wedge with good volume to the upside, the bearish scenario can be reversed. I don't expect it but the possibility always exists. So please keep this in mind.
Please also keep a close eye on the falling wedge . If the price breaks through the lower trendline, we will probably see a parallel downward trend channel developing to the 37,000 usd level which is then the target of our H-S formation.