Bitcoin (BTC) crossed the key psychological price level of $100,000 yesterday, fueling hopes among bulls that the digital asset could continue its upward momentum and achieve a new all-time high (ATH) in the coming weeks.
Head and Shoulders Pattern Bound for Failure?
As Bitcoin regains its key price level, speculation about its future price trajectory has intensified. Analysts closely monitor bearish chart patterns for inactivity, which may indicate a continuation of the bullish trend.
One such formation is the head and shoulders pattern on the daily chart, which received significant attention during December. This pattern was seen as a possible signal that Bitcoin may face a sharp correction within the $70,000 range.
For the uninitiated, a head and shoulders pattern is a cheap chart formation that indicates a possible reversal from an uptrend to a bottom. It consists of three peaks with a central peak as the highest, known as the “head,” surrounded by two lower peaks called the “shoulders,” and a neckline that serves as an important level of support. A break below this neckline confirms a bearish trend.
However, as Bitcoin exceeds $100,000, the probability of a head and shoulders pattern has decreased. According to crypto analyst Aksel Kibar, current market trends suggest that the bearish trend may fail to emerge. Kibar explained:
BTCUSD On a daily scale it creates the same top of the head and shoulders. Price is now challenging the high of the right shoulder. A breach can lead to a reversal of the pattern and should be considered bullish. The price of head and shoulders failure stands at 116K.
Kibar also noted that even if the head and shoulders pattern plays out and Bitcoin drops to $73,800, it may not disrupt the broader bullish trend. Such a retracement could act as a pullback to test the previous ATH around $73,000 as a new support level.
It is worth noting that since surpassing its March 2024 ATH, Bitcoin has not experienced a major pullback, except for the flash crash to $90,500 on December 4. Generally, bull markets are characterized by high price collapses followed by rapid recovery, putting stage the next leg up.
Bitcoin Price Predictions for 2025
Bitcoin price predictions in 2025 are always very active. For example, crypto analyst Jason A. Williams he predicts that BTC could reach $131,500 in the first quarter of 2025.
Similarly, Standard Chartered analyst Geoff Kendrick opinions Bitcoin rises to $200,000 by the end of 2025, driven by factors such as strategic Bitcoin deposits and increasing institutional interest.
However, crypto entrepreneur Arthur Hayes released a a warning note, suggests that the broader crypto market may face a “sad drop” near the inauguration of President-Donald Trump on January 20. At the time of publication, BTC is trading at $100,099, down 0.7% in the last 24 hours.
Featured image from Unsplash.com, Charts from X.com and TradingView.com