‘Head and Shoulders’ Pattern Could Drive Bitcoin to $75K, Says Godbole

Bitcoin’s Recent Decline Hints at Bearish Reversal, Could Drop to $75K

After a strong rally exceeding 50% since early November, bitcoin (BTC) might be signaling a bearish turn as its latest price movements suggest the formation of a significant reversal pattern. If this pattern materializes, prices could retreat to the mid-$70,000 range.

BTC’s price chart appears to be outlining a “head and shoulders” (H&S) formation, a well-known technical pattern that often precedes a shift from bullish to bearish momentum. The first attempt to surpass the $100,000 mark in November set the left shoulder in motion.

The head emerged in mid-December when prices surged past $108,000 before retreating sharply to $92,000. The recent 5% drop toward $97,000 is forming the right shoulder.

Key to confirming this bearish setup is the neckline, a support level linking the lows of the two shoulders. Currently, this neckline lies around $91,500. A breakdown below this point would validate the H&S pattern, potentially signaling a deeper decline.

The measured move method, a common technical tool, suggests a target near $75,000. This calculation subtracts the vertical distance between the head’s peak and the neckline from the neckline level, indicating a significant downside risk.

Traders often rely on such chart patterns to gauge future market moves, but they should remain cautious. While the H&S setup has a historical precedent, it isn’t guaranteed, and unexpected market dynamics can invalidate the signal, leading to sudden reversals.