Head and shoulders is a formation that indicates the reversal of a trend. Bitcoin has been falling, so this reversed head and shoulders suggest it will stop doing so and it will start rising.
The recent correction, though fairly large in scale, does look similar to the previous one, but whether that previous trajectory will be repeated remains to be seen.
NFTs however have been adding a new bullish dimension. To eth, because you pay for them in eth, and also to bitcoin because mainstream media tells their readers these NFTs run on ‘a blockchain, similar to bitcoin.’
In addition there’s the $1.9 trillion stimulus which has now been approved by the Senate, meaning some half a trillion might start making it to the bank accounts of millions of Americans perhaps as soon as next week.
Some will use it to buy bitcoin and eth, with that influx of new demand potentially leading to the play-out of this formation.
If it does, eth may well target $3,000 because that’s what bitcoin did in 2017 when it was at around these prices.
For current bitcoin, it has entered price discovery so no one has a clue, but some just take a zero out and watch how it played out in 2017.
Meaning if it moves up, then it might eye $70,000 or perhaps $80,000 or at whatever level it will be when eth takes $3,000, prior to a proper correction.
Obviously all of this is complete and pure speculation as bitcoin will do whatever it wants, and whether this correction is over or otherwise is the very big question, but it does all feel a bit different this Sunday following eth’s yesterday move.