Bitcoin has touched intraday highs of $42,562, the highest price level this past week.
Analysts say holding above $43K could see BTC-USD eye fresh gains to $50K or higher.
This is likely if an inverse head and shoulder pattern validates, says an analyst
Bitcoin has bounced off lows of $39K this past week, with some selling by whales (amid US tax season selling) contributing to the negative sentiment. But despite the offloading, whale accumulation by addresses holding 10,000 BTC or more has remained in an uptrend since early 2021.
A key price level to watch, according to the highly respected crypto analyst Rekt Capital is $43,000.
He says some large holders sold at this level, suggesting bulls face a challenge here. Break that and BTC could post further gains in the $43K-$50K range.
“Number of unique addresses holding min. 10K BTC has been increasing since Feb ’21. That said, 1st signs of a Lower High forming as some whales offloaded positions at ~$43K,” the analyst noted in a tweet Wednesday.
Possible trend reversal for BTC?
Popular analyst and trader Michael van de Poppe also sees the $42.5K-$43K level as key for bulls. He suggests a daily close above this level would boost buyers and open up $46,000 as the new target.
A run to $50,000 would not be out of the picture in such a scenario.
“If the market wants to see continuation, it has to crack that region around $42.3K for Bitcoin. This is also a daily breaker. If it breaks, I’m assuming a new test of $46K is around the corner and possibly $50k+.”
Crypto trader Dan Gambardello highlights the formation of an inverse head and shoulders pattern as suggestive of a breakout. The pattern is a common indicator that traders use to identify a potential trend reversal.
If the price breaks and sustains above the neckline (in this case an upward sloping line), the pattern’s height suggests a possible retest of prices above $46K. Invalidation of course opens up the possibility of new downward action to recent lows.
“Bitcoin upward sloping inverse head & shoulders, target $46,000,” said Gambardello, the founder of Crypto Capital Venture.
Chart showing inverse head and shoulder pattern on the 6-hour chart. Source: Dan Garmbadello on Twitter.
Pseudonymous trader HornHairs says the market structure on the 12-hour chart suggests new momentum is likely. He notes that any fresh drawdown presents a buying opportunity.
“12H confirmed a break in market structure to the upside – dips are for buying for now,” he tweeted early Wednesday.
Bitcoin was trading at around $42,528 at the time of writing, up 1.1% in the past 24 hours.