Bitcoin (BTC) Price Analysis: 'Head and Shoulders' Pattern Points to a Potential Pullback, But Whale and Market Trends Signal Optimism

Aksel Kibar, a chartered market technician, shared his analysis on December 26, highlighting a “head and shoulders” pattern that could mark a significant pullback in Bitcoin’s price.

After a stellar rally that saw Bitcoin (BTC) briefly cross the $100,000 threshold, a chartered market technician has warned of a potential pullback in the cryptocurrency’s price.

Aksel Kibar, who shared his analysis on December 26, highlighted a “head and shoulders” pattern that could mark a significant correction in BTC’s bullish momentum.

“Breakout from the broadening chart pattern that completed on $BTCUSD… the pullback can take place with a possible short-term H&S top,” Kibar wrote on X, formerly Twitter. “If the pattern acts as a H&S top, the price target is at 80K. This can be the pullback to the broadening pattern that completed with a breakout above 73.7K.”

Kibar’s technical analysis suggests that Bitcoin could test lower price ranges before finding stability, especially as the pattern unfolds on the daily chart.

Whales and market trends signal optimism

Despite warnings of a potential correction, market data offers some hope for Bitcoin bulls. Analysis by Santiment shows a renewed interest from large investors, known as “whales,” in moving stablecoins to exchanges.

“After the post-Christmas market-wide dip, crypto markets are seeing an encouraging trend of whales moving stablecoins to exchanges,” Santiment said in a December 27 analysis, adding that while such movements do not directly confirm immediate purchases, they do indicate optimism as the year ends.

According to Santiment’s observations, stablecoin deposits dominated exchange activity, which the firm interpreted as a bullish sign that could bolster Bitcoin’s recovery.

Resistance at key levels

Bitcoin has faced difficulties in sustaining momentum above the $100,000 level, encountering quick rejections at critical resistance points such as the 21-day simple moving average, which currently stands at around $99,425. This technical resistance has kept the cryptocurrency fluctuating between potential highs and bearish targets.

Market participants are also keeping an eye on short-term volatility, as evidenced by erroneous data on TradingView, which briefly showed Bitcoin’s market dominance at 0% during the post-Christmas sell-off.

Broader market context and ETF updates

The broader crypto market has shown resilience, with Bitcoin Exchange-Traded Funds (ETFs) in the U.S. recording a net inflow after several days of outflows exceeding $1.5 billion. This recovery, though modest, highlights continued investor interest despite the prevailing market uncertainty.

As Bitcoin approaches 2024, its price trajectory will be influenced by both technical patterns and macroeconomic trends. Whether the cryptocurrency revisits the $80,000 level or stages a strong rebound will likely depend on a combination of on-chain activity, whale behavior, and broader market sentiment.