Bitcoin has been recovering during the month of April and the open of the month of May. Some minor correction happened during the past week with Bitcoin failing to breach the $10,000 mark, and falling back to the $9,000 level. As of press time, Bitcoin price is hovering around the $9,100 mark.
Looking at the 4-hour BTC/USD chart, we can see a familiar pattern. Starting from March 13 up to the present, there seems to be a reverse Head-and-Shoulder pattern forming.
The price action from March 13 to March 21 is the left shoulder. The price action from March 21 to April 24 signifies the head. Lastly, the price action from April 24 to present is the right shoulder.
The reverse Head-and-Shoulder pattern is a familiar formation in the financial market that signals a huge upward breakout when trade volumes increase.
The blue line is the resistance line that serves as the neckline for the reverse head-and-shoulder pattern. A break through the neckline will signal a bullish rally towards the $13,000 mark, but a confirmation of volume is needed. If the break through the neckline is not supported by trade volume, it may push the price back down to the major support level around the $8,000 or $7,000 for the worst case scenario.
As of the moment, the market is hovering indecisively waiting for volume confirmation. If in the next few days we see the trade volume go up, we may expect a huge bull run to follow. Keep a close watch on daily trade volumes to plan your trades ahead.
