Bitcoin (BTC) may have printed a classic “head and shoulders” pattern but bulls could still win, says veteran trader Peter Brandt.
In a tweet on Oct. 27, Brandt, famous for his accuracy when it comes to BTC price predictions, refused to flip bearish on Bitcoin.
Brandt: Bitcoin may face “larger congestion”
Despite nearing $58,000 in a fresh wipeout of leveraged traders on Oct. 27, analysts remain broadly calm, even calling for highs to return in a show of strength that should catch many by surprise.
For Brandt, there is also little reason to dismiss Bitcoin on the back of current price action.
“Head and shoulders tops need not always produce a bear market to the implied target or beyond,” he wrote.
“This pattern can also fail (bullish) or morph into a larger congestion (exhausting).”
An accompanying chart showed last week’s all-time high of $67,100 surrounded by two lesser peaks, resulting in the so-called “head and shoulders” formation.
BTC/USD chart showing “head and shoulders” pattern. Source: Peter Brandt/ Twitter
Traditionally, such events preclude an extended downside for an asset, with theupside exhausted and unsustainable after a certain point is reached.
Meanwhile, the idea that Bitcoin could slide into an extended sideways period has reentered the narrative in recent days. Cointelegraph contributor Michaël van de Poppe earlier forecast a slow grind toward $90,000, this potentially only hitting early next year.
All going to plan
For those worried about further losses on BTC/USD, decreasing funding rates — now all but “reset” after the flushing out of leverage — could allay fears.
Related: Bitcoin price dip matches October 2017 with BTC ‘explosion’ still forecast before 2022
Binance had been a particular source of concern over the week with large upside bets creating an unwieldy setup, which ultimately fell apart on the dip.
Bybit funding at 55% APR & Binance at 68% APR
Meanwhile Deribit at 15% and FTX at 7%…
Looks like we have to flush out the apes again…
— Will Clemente (@WClementeIII) October 26, 2021
The current spot price, at around $59,000, further lines Bitcoin up to potentially hit the “worst-case scenario” monthly close of $63,000. Its source, analyst PlanB, correctly predicted both the August and September monthly close — $47,000 and $43,000, respectively.
November, by contrast, should end on a much higher $98,000.