coindesk.com
This is a daily analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Bitcoin $BTC$111,935.45 may not have rallied on Friday's dismal jobs data, which strengthened the Federal Reserve’s rate cuts, but all hope is not lost.
A shorter-duration chart reveals that $BTC is forming a bullish inverse head-and-shoulders pattern – a classic reversal setup – suggesting a potential surge toward $120,000.
An inverse Head and Shoulders (H&S) is a bullish reversal pattern characterized by three troughs: a deeper central trough (the "head") flanked by two smaller but roughly equal troughs (the "shoulders"). The pattern includes a neckline, which is a horizontal trendline connecting the peaks of price recoveries between the troughs.
A decisive breakout above this neckline confirms the reversal from a downtrend to an uptrend. The resulting rally is typically expected to be approximately equal in height to the distance between the deepest trough (head) and the neckline.
As of writing, $BTC looked to be forming the right shoulder of the inverted H&S pattern, with the neckline resistance at $113,378. A move above that would trigger the bullish breakout, opening the door for a rally to nearly $120,000.
The pattern would be invalidated in case of a move below $107,300, reinforcing the bearish setup on the daily chart. In that case, the focus would shift to the 200-day simple moving average support near $101,850.
Read: Bitcoin Stays Below $112K After Tough Jobs Report and Fed Cut Bets.