Bitcoin is showing what could be a head and shoulders reversal pattern

[jaberwock]

Why don't he he uses weekly charts instead?

Then he would see a huge head and shoulders and an inevitable correction back to $1

Technical analysis not always works on cryptos, and the fundamentals may change things too

[1714115215]

1714115215

[1714115215]

1714115215

[1714115215]

1714115215

[ktabb]

Who knows? It might be another head instead of a shoulder (possibility is always there). Honestly, I rarely check the price chart and only decide on my own when I trade, so far it's good. Just a thought, if all traders based their decision on the chart, there's a big possibility that we'll get the same pattern. However, it's not the case because people come and go, there are new traders and some leave trading which probably affect the price so it may or may not happen (the head/shoulder).

Head/shoulder pattern isn't (theoretically) a causal thing, but rather an indication of what investors are doing/thinking. The pattern is meant to be seen as an indicator. Commonly with overpriced assets (like bitcoin) the battle between buyers and sellers forms this kind of a pattern near the top.

Most people are trading bitcoin in the same way that you do - based on their own thoughts. That is why patterns like this form. They are a reflection of investor group psychology.

[azguard]

Head and shoulders pattern on a graph (any sort of graph not just crypto) represents a series of stock or commodity activities that can denote either an upward or downward trend in price. These fluctuations, when depicted in graph form, roughly trace out the shape of a head and shoulders (depend from what point we look at).

We have to keep in mind either of these formations can develop in the matter of hours, or they may take days or weeks; a head and shoulders pattern really can't be called that until the market activity it represents is complete. Cuz of that we are living in interesting times. If either of the head and shoulders patterns gets completed, there should be a strong move (usually buy). For upcoming phase we don't know the direction yet, but from look of thing it will be "buy" move.

[Nagadota]

We're still deep in the middle of a bull market.

The good news that SegWit signalling could be imminent when they actually need to is going to push the price up higher within a month.  After that who knows.

Technical analysis is utter bullshit anyway.  The charts are just a representation of market activity.  The more technical analysts that are involved, the less fundamentals actually determine the value of Bitcoin and the more the price is just empty speculation.  Not to mention the fact that it's essentially gambling because people have different ideas on it.

It's hilarious to see these people gambling their money on a bear market being really soon based on nothing.

[buwaytress]

Head/shoulder pattern isn't (theoretically) a causal thing, but rather an indication of what investors are doing/thinking. The pattern is meant to be seen as an indicator. Commonly with overpriced assets (like bitcoin) the battle between buyers and sellers forms this kind of a pattern near the top.

Most people are trading bitcoin in the same way that you do - based on their own thoughts. That is why patterns like this form. They are a reflection of investor group psychology.

In this particular case, it's probably also an indication of what speculators are thinking as well as investors. The wave of new investors brought it up to the left shoulder - I think that's when the speculators jumped in. These new investors, surprised at the quick gains, took profit. That's the head. But you're absolutely right: group psychology more than anything else.

[ktabb]

We're still deep in the middle of a bull market.

The good news that SegWit signalling could be imminent when they actually need to is going to push the price up higher within a month.  After that who knows.

Technical analysis is utter bullshit anyway.  The charts are just a representation of market activity.  The more technical analysts that are involved, the less fundamentals actually determine the value of Bitcoin and the more the price is just empty speculation.  Not to mention the fact that it's essentially gambling because people have different ideas on it.

It's hilarious to see these people gambling their money on a bear market being really soon based on nothing.

Making bullish bets is also gambling. I personally don't bet on either side because crypto is very high risk and not nearly high enough reward to warrant the risk compared to other investments.

I agree that 99% of technical analysis is bullshit. However, I do think that double top/bottoms and head/shoulder reversals have some merit to them. They often help with finding good exit points after making a profit or good entry points on an asset whose trend is about to reverse. Head and shoulders is considered one of the most reliable patterns. Other than these two though, which are still iffy, I agree that TA is useless. Fundamental analysis is the only way to consistently profit. That being said, fundamental analysis is basically impossible with bitcoin.

[ktabb]

https://twitter.com/demoinvestor/status/879101828721504256

Updated chart... seems to still be consistent with head and shoulders, suggesting trend might reverse