Bitcoin (BTC) Price Just Recorded This Bullish Pattern

Bitcoin’s price chart has recorded a classic bullish pattern, which might indicate a potential uptrend.

Market analyst Jake Wujastyk highlighted the formation of an inverse head and shoulders pattern on the daily candle chart. This has coincided with the price closing above a key volume shelf.

A bullish pattern

An inverse head and shoulders pattern is often considered a predictor of a market reversal from a downtrend to an uptrend. The chart shows two lower peaks, known as shoulders, flanking a deeper valley referred to as the head.

This pattern is completed when the price breaks out above the resistance level that forms the “neckline,” which, in this case, coincides with the volume shelf—a price level with a high number of previously traded contracts, indicating strong support or resistance.

#Bitcoin Inverse head & shoulders on the daily candle chart as price closed above the volume shelf today. $BTCUSD #Crypto pic.twitter.com/zE1lDJGnAM

— Jake Wujastyk (@Jake__Wujastyk) February 2, 2024

The recent closure above this critical level at approximately $43,000 suggests that buyers are gaining control and could propel Bitcoin’s price higher in the near term.

A massive options expiry

Current Bitcoin price performance indicates a cautious optimism as the market digests the upcoming expiry of 22,000 BTC options.

The Maxpain point, where most options would expire worthless, stands at $42,000, which is just below the current trading level, implying a potential support region.

The notional value of these options is a substantial $960 million, underscoring the importance of this event for market sentiment.

This week, the cryptocurrency market has been relatively flat, with realized volatility (RV) and implied volatility (IV) trending lower for major terms, indicating a period of consolidation.

Despite the quiet market, Bitcoin spot exchange-traded funds (ETFs) are gradually attracting incremental capital flows, a bullish indicator for the cryptocurrency. Conversely, some large-scale traders, or “whales,” have been reducing their positions, suggesting a mix of profit-taking and strategic rebalancing.

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