A recent analysis of Bitcoin’s price action has revealed a potentially bullish trend, with analysts identifying two inverse head-and-shoulders patterns on the weekly time frame. This development hints at a substantial price surge that could see Bitcoin (BTC) reaching targets between $170,000 and $360,000 in the current cycle.
The inverse head-and-shoulders (IH&S) pattern is a well-known bullish reversal formation characterized by three troughs, where the central “head” is lower than the two “shoulders” on either side. Typically, a breakout above the pattern’s neckline leads to a parabolic price rise, bolstering investor optimism about Bitcoin’s future.
The first of the identified IH&S patterns formed from November 2024 and resolved in July, with Bitcoin breaking above its neckline at around $112,000. The rebound from this crucial level suggests that this formation is actively influencing the current market dynamics. The expected price target from this pattern is around $170,000, representing a 49% increase from current levels.
Simultaneously, a larger IH&S pattern has been in development since March 2021, projecting an even loftier target of $360,000, which would signify a striking 217% increase from the present price. Bitcoin broke above the neckline of this larger formation at approximately $73,000 during a post-US election rally in November 2024. Following a drop to $74,400 in April, the price retested this breakout level, indicating that the bullish trend remains intact.
Analyst Merlijn The Trader remarked on this development, describing it as “the Bitcoin inverse head and shoulders of dreams” and declaring it “supercycle ignition.” This sentiment echoes broader market expectations, as a similar formation spotted on the four-hour chart suggests a shorter-term target of $120,000, provided Bitcoin maintains its position above $113,000.
Reinforcing these bullish sentiments, Bitcoin has witnessed a notable rebound in institutional demand as indicated by recent inflows into spot Bitcoin exchange-traded funds (ETFs). Data from SoSoValue reports that these ETFs experienced inflows totaling $1.15 billion over a span of three days. Notably, the $752 million influx recorded on Wednesday marked the highest level of inflows since mid-July, underscoring a potential resurgence of institutional interest in the cryptocurrency.
Market intelligence firm Santiment noted the sharp increase in ETF investments, suggesting that while retail investors may be stepping back, institutional money is actively returning to Bitcoin. This pattern of inflow has historically been a precursor to significant price increases in previous crypto rallies.
The evolving situation indicates that Bitcoin could be on the verge of a transformative period, with technical patterns and increasing institutional interest aligning to potentially drive prices to unprecedented heights. As always, it is essential for investors to conduct thorough research and consider the inherent risks associated with trading and investment in cryptocurrencies.
