Bitcoin (BTC) surged to a three-month high during the first trading session in Asia on October 23, igniting hopes of a substantial rally among investors.
While this upswing has indeed rekindled confidence in the pioneer cryptocurrency, there is a strong to remain cautious, according to an October 22 post by prominent crypto analyst Ali Martinez.
Technical indicators point to a trend reversal
In his analysis, Martinez said BTC appears to be facing an “impending price correction,” following the latest rally unless it can print a daily candlestick close above $31,560.
There are two main indicators pointing at a potential reversal – a head and shoulders pattern, and the relative strength index (RSI).
As can be observed from the chart below, Bitcoin’s price may be forming the head and shoulders pattern, which is considered a reliable indicator of a trend reversal, usually from bullish (upward) to bearish (downward) or vice versa.
Head and Shoulders pattern and RSI on Bitcoin cha
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