Inverse Head-and-Shoulders Pattern in Bitcoin (BTC) Price Charts Might Not Be as Promising as it Appears

A widely recognized bullish formation in Bitcoin's price charts might not be as promising as it appears, warns veteran trader Peter Brandt.

Veteran trader Peter Brandt has issued a cautionary note on a widely recognized bullish formation in Bitcoin’s price charts, suggesting it might not be as promising as it appears.

The cryptocurrency has developed an inverse head-and-shoulders pattern, which is typically seen as a sign of a potential upward reversal after a downtrend. However, the structure presents a complication—the neckline is sloping downward.

Brandt, who has over 40 years of experience in commodities trading, explained that he prefers head-and-shoulders formations with horizontal necklines, considering them far more dependable.

The downward angle of the current setup suggests a gradual reduction in buying pressure, raising concerns that any breakout attempt from the neckline could be quickly absorbed, leading to a downturn rather than a rally.

“We rarely see completed H&S [head-and-shoulders] patterns in commodities or crypto. When we do, they are usually PHMs [primary head-and-shoulders] and the neckline is horizontal,” Brandt stated on X, formerly known as Twitter.

He further explained that in a primary count, the neckline should be horizontal, and when it slopes, it indicates a secondary or tertiary count, rendering the pattern less reliable.

“The sloping neckline also suggests that sellers have the upper hand and any breakout will be quickly absorbed,” Brandt added.

Brandt's analysis comes as trader Josh Olszewicz also highlighted the pattern on Bitcoin’s daily chart, suggesting that this may be a crucial moment for bulls to regain control. Should they fail to push the price higher from here, Brandt sees Bitcoin slipping back into the $60,000-$70,000 range.

As of now, CoinGecko data shows Bitcoin trading at $83,091, down 0.7% in the past 24 hours. The asset briefly hit an intraday low of $81,769 earlier on Sunday, struggling to regain momentum amid heightened global economic uncertainty.