- Bitcoin fails to confirm a reversal pattern
- Bulls fight to invalidate a head and shoulders
- Friday’s jobs report could be decisive for Bitcoin and the US dollar
After an explosive start to the year, Bitcoin’s advance stalled when it ran into strong resistance around the $30,000 level. Bulls had expected that breaking that area was only a matter of time, opening the way to further gains.
But bears did not relent. In fact, a reversal formation emerged over the past few months, calling the bullish outlook into question.
The head and shoulders pattern is relatively easy to spot. It typically appears near the end of an uptrend and, when valid, traders often anticipate a price depreciation roughly equal to the pattern’s measured move.
In this situation, the measured move points to a target near $23,000. However, price never reached that level, which raises doubts about whether a true reversal has occurred.
That leads to two key questions: Is the head and shoulders pattern already invalidated? And if it is, when will bulls regain clear control of the market?
Bitcoin chart by TradingView
Friday’s NFP report could be decisive for Bitcoin and the US dollar
It’s no surprise that Bitcoin’s inverse relationship with the U.S. dollar has strengthened recently. As institutional investors increasingly add Bitcoin to their portfolios, the cryptocurrency behaves more like a mainstream financial asset, moving in tandem with broader market forces.
One way to illustrate this linkage is to compare recent moves in EUR/USD with Bitcoin’s price action.
EUR/USD found a low last October below 0.96, and Bitcoin’s low occurred around the same time.
Afterward, EUR/USD climbed above 1.10—and Bitcoin followed a broadly similar trajectory.
These parallels emphasize that the driving force isn’t the euro so much as the dollar.
A negative correlation means Bitcoin and the U.S. dollar tend to move in opposite directions. In a perfectly inverse relationship, the correlation coefficient would be -1, though such extremes are rare in real markets.
Still, the pattern shows Bitcoin often moves in step with shifts in the dollar.
That makes Friday’s nonfarm payrolls (NFP) report especially important. A weaker-than-expected report would likely push the dollar lower and Bitcoin higher, strengthening bulls’ case. Consequently, buyers should monitor the $30,000 area closely—this level remains the critical point that would invalidate the head and shoulders scenario if convincingly breached.