Bitcoin (BTC) may have formed a traditional “head and shoulders” pattern, but veteran trader Peter Brandt believes bulls may still triumph.
Bitcoin might encounter “increased congestion”
Despite a new wipeout of leveraged traders exceeding $58,000 on Oct. 27, analysts remain cautious, even predicting a return to highs in a show of strength that could surprise many.
On the basis of current price activity, Brandt sees no reason to reject Bitcoin.
“Head and shoulders peaks do not always result in a bear market to or beyond the implied objective,” he stated.
“This pattern has the potential to fail (bullish) or to develop into a greater congestion (exhausting).”
The so-called “head and shoulders” configuration was formed by last week’s all-time high of $67,100 being flanked by two smaller peaks.
Historically, such circumstances have prevented an asset’s protracted decline. With the upside becoming exhausted and unsustainable after a certain threshold is obtainable.
Meanwhile, the possibility of Bitcoin entering a lengthy sideways spell has resurfaced in recent days. Earlier this year, Michal van de Poppe predicted a steady climb to $90,000, with a target date of early next year.
All going to plan
Reduced financing rates, which have all but “reset” following the flushing out of leverage, may assuage worries of more losses on BTC/USD.
Over the week, Binance had been a cause of anxiety, with huge upward bets generating an ungainly position that eventually broke apart on the downturn.
Bitcoin’s current spot price of roughly $59,000 puts it on track to reach the “worst-case scenario” monthly closing of $63,000. Its source, analyst PlanB, anticipated the monthly closes for August and September right — $47,000 and $43,000, respectively.
November, on the other hand, expected to conclude on a considerably higher $98,000.