Yerevan (CoinChapter.com) — At least three altcoins — VeChain, BitTorrent, and Dent — have signaled their intention to pursue a massive bullish breakout as of late.
Simply put, the three Bitcoin rivals have formed a similar-looking Inverse Head and Shoulder pattern on their respective four-hour charts. Inverse Head and Shoulders (IH&S) structures consist of three consecutive troughs with the middle one, the head, deeper than the other two, the shoulders. Meanwhile, all the troughs hang by a single resistance level, or neckline.
Traders treat IH&S patterns as bullish reversal indicators based on their historical significance in the traditional financial markets. The asset in concern typically breaks above the neckline. And if accompanied by strong volumes, the upside move takes the shape of a full-fledged bullish breakout.
VeChain’s VET, BitTorrent’s BTT, and Dent’s DENT have lately showcased clues of an IH&S formation on their charts. While their volatility and volumes vary, each altcoin somewhat hints at a potential bullish breakout because of the said upside-biased technical structure.
VeChain (VET/USD) 4H Chart
The VET/USD setup per the IH&S pattern dictates a bullish breakout towards $0.19 in the coming sessions, a level that also coincides with the 200-4H simple moving average (2004H SMA; the orange wave) and with the resistance area that held the VeChain token’s bullish bias during the May 19-21 trading session.
Meanwhile, the 20-4H exponential moving average (20-4H EMA; the green wave) supports VeChain’s upside bias, with the 50-4H simple moving average (50-4H SMA; the blue wave) providing an additional price floor to safeguard the altcoin’s bullish interests.
A reversal from the IH&S neckline followed by a breakdown below the 20-4H EMA and 50-4H SMA could invalidate the bullish setup entirely. VeChain would risk falling back to its sessional low of $0.065 should a reversal happen.
BitTorrent (BTT/USD) 4H Chart
Similar to VeChain’s bullish setup, the BitTorrent token’s benchmark pair BTT/USD anticipates a bullish breakout above its IH&S neckline. The pair’s upside target lurks around $0.005.
On the other hand, a reversal from the neckline risks crashing prices below the 20-4H EMA and 50-4H SMA. Should it happen, BitTorrent would test its sessional lows around $0.002 for the next rebound move.
Dent (DENT/USD) 4H Chart
Like BitTorrent and VeChain, Dent’s benchmark trading instrument DENT/USD could break above the neckline of its IH&S pattern. The upside target following a volume-backed price overshoot would be near $0.006.
Conversely, a failure to log a breakout above the neckline would mean a short-term rebound towards the 20-4H EMA and 50-4H SMA. An extended sell-off would have Dent test its sessional low of $0.002.