Seasoned trader Peter Brandt says Bitcoin (BTC) is flashing a common bull market pattern that typically precedes a burst to the upside.
The trader, who gained legendary status after calling the 2017 Bitcoin collapse, says BTC may soon rally to around $80,000 as it threatens to take out its short-term diagonal resistance.
However, Brandt warns that BTC may witness a significant correction after the rally to follow a pattern commonly seen in Bitcoin bull markets.
“This same basic pattern has been common in past bull markets in Bitcoin.”
Looking at the trader’s chart, he seems to suggest that a dump at around $58,000 will follow the lump or the leg up. If Bitcoin follows the pattern, BTC will ignite a new uptrend after the dump phase.
At time of writing, Bitcoin is worth $69,173, down 3.58% in the last 24 hours.
The trader also shares his thoughts on the probability that the crypto markets will witness an altcoin season. According to Brandt, it is within the realm of possibility that an altcoin season won’t come to light based on the strength of Bitcoin and the Bitcoin dominance (BTC.D) chart.
Bitcoin dominance tracks how much of the crypto market cap belongs to BTC. A rising BTC.D chart indicates that Bitcoin is outperforming the general altcoin market.
Says Brandt,
“What if there won’t be an altcoin season?”
Based on the trader’s chart, he appears to suggest that BTC can make up as much as 66.32% of the crypto market cap after BTC.D broke out from a multi-year consolidation between 39.50% and 48%.
At time of writing, BTC.D is hovering at 54.24%.
The trader is also keeping a close watch on the Ethereum versus Bitcoin pair (ETH/BTC). Brandt says that ETH/BTC may have triggered a bear trap after recovering a critical support level at 0.0495 BTC ($3,421).
A bear trap happens when an asset breaks below a support level but quickly reclaims it to potentially trigger a trend reversal.
At time of writing, ETH/BTC is trading for 0.0506 BTC ($3,494).
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