Peter Brandt, a veteran commodities trader, believes that Bitcoin has formed a classic top pattern.
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— Michael Saylor⚡️ (@saylor) January 14, 2025
He recently pointed out a head and shoulders pattern on Bitcoin’s daily candle chart, which began forming in late November 2024. The pattern shows a neckline just above $90,000 and a potential target around $75,000.
Brandt outlined three possible outcomes based on this formation. First, Bitcoin could fulfill the pattern by breaking the neckline, leading to a sell-off towards the $75,000 target.
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Second, the pattern could turn out to be a bear trap, where the price briefly breaks below the neckline but quickly reverses after targeting short sellers.
Third, the pattern could evolve into a larger structure. Brandt’s analysis is not new.
Brandt’s potential bear trap analysis
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On January 9, he discussed that historically, Bitcoin’s head and shoulders patterns often result in bear traps.
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This view is based on the “hump slump bump dump pump” pattern, where Bitcoin forms a head and shoulders pattern, only to result in a bear trap before continuing its parabolic run. On December 29, Brandt suggested that Bitcoin might be repeating this historical pattern but required a deeper correction.
This potential bear trap could occur if Bitcoin briefly breaks below the $90,000 neckline. As of now, Bitcoin is trading at $93,900, down over 5% in the past seven days. The crypto market has been thrown into uncertainty over the past few weeks due to macroeconomic factors.
Brandt’s analysis provides insight into the potential outcomes for Bitcoin based on the current market conditions and historical patterns. However, it is important to note that this analysis should not be considered financial advice, and readers are encouraged to conduct their own research before making any investment decisions.