Inverted head-and-shoulders signals a bullish reversal, as the price breaks the neckline with RSI confirming momentum.
Retest of the neckline solidifies support, setting the stage for sustained upward movement in altcoin market capitalization.
RSI's upward trend aligns with the price trajectory, reinforcing market confidence and signaling a shift to bullish sentiment.
Cryptocurrency market capitalization apart from Bitcoin, exhibits bullish momentum with an inverted head-and-shoulders pattern. This technical setup often signals a potential market reversal. Following the breakout above the neckline, price action suggests a retest phase before continued upward movement. The RSI reinforces this bullish sentiment, showing a clear trendline breakout and upward trajectory.
Key Pattern Signals Reversal
Bullish reversal can be predicted by the inverted head-and-shoulders pattern. The head, which is deeper than the shoulders, and the neckline, which slopes downward, are its three troughs. The left shoulder appeared after a bearish trend, followed by a recovery. The head marked a deeper low, reflecting intense bearish pressure, which eased during the rebound. Finally, the right shoulder formed, showing a higher low, indicating fading bearish momentum.
The breakout above the neckline confirms this pattern, marked by a green candle on increased buying pressure. The RSI further supports the bullish sentiment by climbing above 50, reflecting growing market confidence. Additionally, the upward slope in the RSI aligns with the projected price movement, reinforcing the likelihood of sustained bullish momentum.
Price Retest and Projection
After breaking the neckline, the price experienced a minor pullback. This retest phase, a common consolidation move, often solidifies support before the next upward surge. The price projection aligns with the head-to-neckline distance added above the breakout point. Hence, this suggests further gains in the altcoin market capitalization.
Moreover, the RSI remains bullish, continuing to rise and supporting the price’s upward trajectory. This alignment between the RSI and price action shows the market’s transition from bearish to bullish sentiment. Besides, the absence of other indicators like volume does not detract from the pattern’s reliability but suggests additional analysis could add clarity.