Bitcoin (BTC), the largest cryptocurrency by market capitalization, may experience a price correction if a potential pattern on its daily chart is validated.
Ali, a cryptocurrency analyst, points out a potential head-and-shoulders pattern forming on the Bitcoin daily chart.
The head-and-shoulders chart pattern is depicted by three peaks, with the center peak being the highest. The head-and-shoulders chart shows a bullish-to-bearish trend reversal and might indicate that an upward trend is coming to an end.
Aside from that, Ali stated that the TD Sequential indicator on the BTC daily chart may hint at a possible sell signal. Also, the RSI has reached 74.21 — a level that has triggered sharp corrections since March.
Having said this, Ali believes an impending price correction might be on the horizon until BTC manages to log a daily candlestick close to over $31,560. In the event of a price correction, Bitcoin might reach $29,500 or even $28,630.
At the time of writing, BTC was up 2.19% in the last 24 hours to $30,601.
History suggests otherwise
If history is any indicator, Bitcoin's current advance, spurred by optimism about new demand from exchange-traded funds, may have further to run.
Bitcoin gained 10.29% in the last seven days, the highest weekly gain since June, as traders bet on the first U.S.-spot bitcoin ETF being approved in the coming weeks.
Bloomberg observed that weekly gains of at least that magnitude have predicted a 10% average Bitcoin rise over the next month for the past five years.
According to CoinMarketCap data, Bitcoin has recovered 87% this year and currently accounts for 51.4% of the $1.16 trillion digital-asset market, a level of dominance it last held in 2021. The digital asset is still far below its 2021 high of roughly $69,000.