Legendary trader Peter Brandt thinks that it is within the realm of possibility for Bitcoin (BTC) to witness a meltdown before igniting a nearly 80% rally.
Brandt tells his 771,500 followers on the social media platform X that BTC appears to be flashing a price pattern using the terms bump, hump, slump and dump.
[adinserter block="1"]The pattern, which was also witnessed last year before BTC surged from $50,000 to above $100,000, suggests that BTC may “dump” to around $84,000 before recovering and ascending toward $150,000.
“The big question in my mind is whether Bitcoin will get one more dump (or more lengthy congestive chop) before the pump. Remember, markets generally do not [soar] until retail traders get worn out.”
But Brandt warns that Bitcoin can go lower and plunge all the way down to $76,000 if it completes the bearish head-and-shoulders pattern (H&S) on the daily chart.
A head-and-shoulders pattern typically suggests that an asset is losing momentum and could reverse its uptrend if the price breaks below the structure’s support. Based on Brandt’s chart, BTC’s support level stands at around $90,000.
“This is a classic H&S top pattern. BTC H&S patterns can do one of three things:
-Complete and trend to target
-Fail with a bear trap
-Morph into a larger pattern.”
At time of writing, BTC is trading for $94,625.
Looking at payments-focused altcoin XRP, Brandt shares a chart indicating that the altcoin has broken out of its six-week consolidation period after shattering its diagonal resistance at $2.38.
“Leader of the pack XRP.”
At time of writing, XRP is worth $2.53.
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