According to the trading expert, Bitcoin is forming a “a broadening top” that typically precedes major market reversals.
0
According to the trading expert, Bitcoin is forming a “a broadening top” that typically precedes major market reversals.
Veteran technical analyst Peter Brandt warned that Bitcoin’s current chart structure mirrors the soybeans market of the 1970s, when prices fell by half after reaching their peak.
According to Brandt, Bitcoin appears to be forming a rare pattern known as a broadening top, which historically signals a trend reversal.
“In the 1970s, soybeans formed the same pattern and then dropped by 50%,” he said.
The analyst noted that if history repeats itself, the downturn could affect not only the broader market but also companies holding large amounts of Bitcoin, including Michael Saylor’s firm, MicroStrategy (MSTR).
According to CNBC, the company’s stock has fallen 10% over the past 30 days, reflecting pressure on corporate crypto treasuries due to a decline in net asset value.
Brandt added that the major rally expected by the crypto community might not happen, and Bitcoin could pull back to around $60,000.
Not all analysts share Brandt’s pessimism. Industry figures, including BitMEX co-founder Arthur Hayes, believe Bitcoin still has room for one final major move in the current cycle. Some forecasts even suggest growth to $250,000.
In his latest essay, Hayes argued that Bitcoin’s traditional four-year cycle no longer applies to the modern market.
The main difference, he said, is that the new administration in Washington, led by Donald Trump, plans to “heat up the economy” and stimulate growth to ease the national debt burden. Among the priorities of Trump’s team, Hayes highlighted lowering housing costs and revitalizing the credit market.
“Listen to our monetary masters in Washington and Beijing. They’re clearly saying that money will get cheaper and more abundant. That’s why Bitcoin keeps climbing, anticipating this almost inevitable future,” Hayes wrote.
According to CoinGlass, the fourth quarter has historically been Bitcoin’s strongest, with an average return of 78,49%. October is also statistically one of the most favorable months for the crypto market.
As of writing, Coinmarketcap data shows Bitcoin trading around $108,000, down 4% for the month. The asset remains 14,45% below its all-time high of $126,198 recorded on October 6.
The crypto market has yet to recover from the record $19B liquidation wave. The Fear and Greed Index remains in the “fear” zone at critical levels around 25-30.
This post is for informational purposes only and does not constitute advertising or investment advice. Please do your own research before making any decisions.
0
