I would like to take the credit for being the first one to see this, but I've seen quite a few people on Youtube and Twitter watching this pattern. If you look at the Bitcoin one day chart you can see a nice inverse head and shoulder pattern forming in the Bittrex chart below. Keep in mind over the next few days if this chart breaks down at any point the below information is irrelevant.
I just want to make it clear that I'm not giving financial advice. I've been reading up on chart patterns and technical analysis for the past 6 months or so and want to use the blockchain to keep notes on if predictions I make are right or wrong. I'm not investing any money into Bitcoin right now and suggest that anyone thinking of investing in Bitcoin do their own research and understand the risks (that it could possibly be worthless or outlawed) before investing in Bitcoin or any other cryptocurrencies.
The Next Few Weeks
Over the next few days what I would like to see is that Bitcoin will break and close above the neckline as shown in the below chart. If it manages to do that over the next few weeks I expect the price to bounce off the $12,500 mark back down to the neckline then up to around the $14,000 mark where it will bounce back down to $12,500 before it finishes it moves up somewhere in the $15,000 range.
The reason I'm thinking the $15,000 dollar range is that one way you can predict how far the price will go up in an inverse head and shoulder pattern is measure the difference between the neckline and the bottom of the head (around $4,500) will be how far above the neckline the price will move after it breaks out ($11,000 + $4,500 = $15,500).
Watching Bitcoin Dominance
I'm also seeing a lot of sentiment that Bitcoin still needs to recover some of its dominance before the alts can break out again. I'm not sure if this is the case, but think Bitcoin breaking the 40% dominance mark is definitely in the realm of possibility.
This is 100% speculation. No idea what's going to happen with BTC dominance, but this is what I've been seeing is a common prediction on Youtube and Twitter. Which brings you back to the age-old technical analysis question of does technical analysis really work or is it just a self-fulfilling prophecy? Are these predictions going to come true because they are that good at reading the charts, or convincing enough people where the top is going to be so they all sell at as similar price?
Just remember do your own research and come up with your own trading plan. Don't rely on those who are shilling coins because they just want to sell you their own bags.