Bitcoin is leading the recovery from the front. It has bounced sharply from its recent lows of $6,120.45. The probability of a bullish inverse head and shoulders (H&S) pattern is still alive. The inverted H&S will complete on a breakout and close above the neckline at $6,953.38. This gives it a pattern target of $7,996.11.
Once the BTC/USD pair scales above the $7,000 levels, it doesn’t have any significant resistance until $7,750.
The digital currency will pick up momentum above the downtrend line, which will invalidate a bearish descending triangle pattern. Failure of a bearish pattern is a bullish sign and can result in a rally to $10,000 in the medium-term.
The rallies this year will be much more muted when compared to the scorching rally in 2017. Hence, the investors should be patient and ready for a volatile ride. Therefore, please keep the position sizes small until a clear uptrend begins.
The stops on the long positions initiated at $6,650 can be maintained at $5,900.