This Patterns Suggests A Major Failure Coming For Bitcoin

Summary

In this video, the speaker discusses Bitcoin's current price action, focusing on a potential head and shoulders failure pattern. Despite the bearish formation, the speaker anticipates upside movement with a possible target of $114,000 to $119,000 by February, depending on key confirmation levels. Additionally, the video covers various technical indicators, including RSI and momentum signals, and emphasizes the likelihood of a higher low around $95,000 if any pullbacks occur. The speaker also introduces new tools and upgrades for trading services like Quant Prime, offering discounts for viewers.

Takeaways

• 😀 Bitcoin is potentially setting up for a significant failure, with the head and shoulders formation suggesting a bearish reversal, but the failure of this pattern could also signal an upside move.
• 😀 A new year sale is being offered, with discounts on services like Quant Prime (25% off for lifetime subscriptions) and other programs, using code '2025'.
• 😀 The head and shoulders formation for Bitcoin was confirmed after the $100,000 rejection in December, but the pattern is close to failing, which would suggest a higher price movement for Bitcoin.
• 😀 The failure of the head and shoulders pattern can be confirmed if Bitcoin closes above $101,435 on CME, which would imply a target price range between $119,000 to $120,000.
• 😀 Bitcoin could potentially face a short-term pullback to the $95,000–$96,000 range before resuming upward movement, which would still be seen as an opportunity for a higher low.
• 😀 A meta signal, which is a continuation signal from the 4-hour time frame, indicates Bitcoin could target $101,345, $103,000, and $105,844, with varying probabilities of success.
• 😀 There’s a simple RSI-based strategy being used to track Bitcoin's movements, which shows a high profit factor but a relatively low strike rate (about 35%) for trades.
• 😀 The 2-day RSI has shown hidden bullish evidence, and if it crosses above its moving average, it could signal more upside continuation for Bitcoin, with targets around $119,000.
• 😀 Bitcoin's stochastic momentum on the daily time frame has reset and is pointing upward, signaling continued upside momentum as long as Bitcoin stays above $95,200.
• 😀 If Bitcoin closes above $102,000 this week, the likelihood of a price move towards $116,000 increases, potentially extending higher depending on the weekly close.
• 😀 Historically, Bitcoin tends to form its January lows early in the month (around the first week) if it closes positively, further strengthening the case for an upward continuation in January 2025.

Q & A

What is the head and shoulders pattern mentioned in the video, and why is it significant for Bitcoin's price?

The head and shoulders pattern is a classic technical analysis formation that typically signals a reversal of an uptrend to a downtrend. In the context of Bitcoin, the pattern was identified after Bitcoin reached a high of $100,000 in late December. The significance lies in its potential to signal a bearish reversal, but the video suggests this particular pattern could fail, with an implied upside target if the pattern breaks down.

What does the speaker mean by the 'failure' of the head and shoulders pattern?

The failure of the head and shoulders pattern occurs when Bitcoin closes above the right shoulder, which is at $101,435 for CME futures. If Bitcoin achieves this, it invalidates the bearish pattern and signals potential for further upside price movement.

What price targets are mentioned if the head and shoulders pattern fails?

If the head and shoulders pattern fails, the implied target would be an upside move to between $119,000 and $120,000, as per the calculations based on the pattern's failure confirmation.

What are 'meta signals' in the context of this analysis, and how do they help traders?

Meta signals are probabilistic trading signals that are designed to help traders identify areas of interest for entry and exit points. They provide valuable perspective for stop losses and price targets, thus helping traders stay on track and avoid getting 'wrecked' by unpredictable market movements.

How does the Quant Prime service factor into the analysis provided in the video?

The Quant Prime service is introduced as a tool to automate and optimize trading strategies, particularly for backtesting. The speaker highlights its ability to provide advanced trading signals and automations, like the one used to test the 2-day RSI crossover strategy in the video.

What is the RSI crossover strategy, and how is it tested in the video?

The RSI crossover strategy involves opening a long position when the 2-day RSI closes above its exponential moving average and closing the position when the RSI crosses below. The video tests this strategy using historical data from 2015 to present, showing that it would have been successful around 35.5% of the time with a high profit factor.

What role does the 2-day RSI play in the analysis, and why is it significant?

The 2-day RSI is used as an indicator to track momentum and identify potential reversals. A bullish signal is generated when the RSI crosses above its exponential moving average, suggesting a potential for upward price movement. The video points out that this signal is currently close to being triggered.

What is the potential outcome if Bitcoin continues above $101,435?

If Bitcoin closes above $101,435, it would confirm the failure of the head and shoulders pattern and signal a potential for upward continuation. The video predicts that Bitcoin could reach at least $114,000 before the end of February, with further targets depending on market conditions.

What does the speaker say about the likelihood of a pullback and where could it occur?

While the speaker acknowledges the potential for a pullback, they believe it would likely be a higher low rather than a new low. They suggest that a pullback could occur around $95,000 to $96,000 but would still present a buying opportunity for long trades.

What historical data does the speaker refer to regarding Bitcoin's price behavior in January?

The speaker refers to historical data showing that, in positive closing Januaries, Bitcoin typically puts in a low around the first week of January. This trend strengthens the idea that the lows for January 2025 could already be in place, reinforcing the bullish case if Bitcoin closes the month positively.