Crypto trader Nicholas Merten is detailing a key target that Bitcoin (BTC) must reach in order to confirm a bull market.
Merten tells his 512,000 YouTube subscribers that Bitcoin is likely to undergo a steep correction if it fails to break above the range it has been trading in for about six months now.
“If we are going to really kick off a new bull market there are key things that Bitcoin needs to do.
From this point on here [around $28,000], Bitcoin needs to get past this channel between $28,000 to $32,000, the price range of prior support in the last bull market that potentially is serving as resistance right now. At least it’s been playing like that since back in April…
If we come up here to $31,000 again, like we did back in April, like we did in June and July and we don’t have the follow-through to get up and set new relative highs and clear through this resistance at $32,500, then we are likely going to roll back down.”
According to Merten, the heads and shoulders pattern depicted on Bitcoin’s weekly chart (above) is indicating an incoming bearish reversal. A head and shoulders pattern is characterized by three peaks with the middle peak being the “head” and the two outer peaks being the “shoulders.”
“If you have an inverse head and shoulders on lows then that can be a bullish reversal to the upside. But this is a typical head and shoulders pattern. If we face resistance here [at just below $32,000] and we break below the channel [around $25,000], that would be a pretty clear short opportunity in my opinion.”
Bitcoin is worth $27,598 at time of writing.
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