If you are new to Bitcoin, you might not know the name Peter Brandt yet. In short, he’s a veteran trader (since 1975!) who accurately predicted the 2017 Bitcoin crash, with more than 700,ooo followers on X currently. Now, he’s back with a new prediction that has many of us paying attention. According to Brandt, Bitcoin is readying for a breakout that might end its current multi-month correction. Bitcoin is currently trading at $62,720, 1.2% down in the last 24 hours.
What’s the Setup?
In a recent post on his Substack, Brandt shared that he’s opened long positions in Bitcoin, signaling that he’s betting on a price increase. Why? It all comes down to a technical pattern known as the “megaphone formation.” This pattern, also referred to as a broadening triangle, is typically seen as a bullish sign if the price can break through its diagonal resistance.
Brandt points out that Bitcoin looks promising after forming an inverse head and shoulders pattern within this larger megaphone setup. For those unfamiliar, an inverse head and shoulders pattern usually indicates that buyers are stepping in, preventing the price from hitting recent lows, and suggesting that a bullish trend could be on the horizon.
The Technical Details
Brandt explains, “The dominant chart construction on the weekly graph is a five-month broadening triangle or megaphone. A major breakout could be pending.” He goes on to say that on the daily chart, a potential inverse head and shoulders pattern has formed as part of this broader setup. To capitalize on this, Brandt said he bought a 2.7 BTC position, with a risk management strategy in place, including a protective stop just below a recent low.
If you’re wondering what this could mean for Bitcoin’s price, Brandt’s analysis suggests that BTC could break out from the large megaphone pattern if it manages to clear the resistance level around $72,000. This would be a significant move, potentially ending the period of uncertainty that has kept Bitcoin’s price in check.
What Does This Mean for Us?
For those of us watching Bitcoin, Brandt’s analysis is both exciting and a bit nerve-wracking. He’s cautious, noting that as long as Bitcoin trades within the megaphone pattern, the trend remains uncertain. Last week, he shared with his followers on X, “Weekly and daily graphs continue to form a megaphone or broadening triangle pattern in BTC. No declaration of the next trend yet BTC.”
In simple terms, while Brandt is optimistic about a potential breakout, he’s also aware that Bitcoin needs to make a decisive move above this pattern to confirm a new trend. Until that happens, the situation remains uncertain.
Charts of continuing interest are Bitcoin and Ether.
Weekly and daily graphs continue to form a megaphone or broadening triangle pattern in BTC
No declaration of next trend yet $BTC$ETH will remain defensive unless/until close above 3050 occurs pic.twitter.com/aEESwhX5oC— Peter Brandt (@PeterLBrandt) August 20, 2024
What Should We Do?
If you’re thinking about buying Bitcoin or adjusting your current position, it’s worth keeping an eye on these technical patterns. As always, it’s essential to manage risk and not make hasty decisions. Brandt’s protective stop strategy is a good reminder that even seasoned traders approach these situations with caution.
Whether you’re a long-term holder or someone who likes to trade the trends, staying informed and understanding the signals in the charts can help you make more confident decisions. Keep watching that $72,000 level—if Bitcoin breaks through, we might be in for a new chapter in this ongoing crypto story.
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