Veteran crypto analyst Peter Brandt has identified a significant pattern in Bitcoin’s (BTC) price chart, possibly indicating a major shift in its price trajectory. Utilizing classical charting techniques, Brandt has highlighted an inverted or expanding triangle pattern that could have substantial implications for traders and investors.
On August 12, Brandt used X (formerly known as Twitter) to illuminate this pattern formation in Bitcoin’s price movements, sharing a detailed chart that spans from May 2023 to November 2024. The chart illustrates two descending trend lines diverging from one another, forming the unique inverted or expanding triangle shape. Such formations in traditional chart analysis can often suggest either a continuation or a reversal in the asset’s price movement.
Despite the potentially bullish indications of this pattern, Brandt cautioned that the absence of a breakout means he is not currently making any trades. He emphasized his commitment to basing trades on concrete chart patterns rather than mere speculation. Operating with a strict adherence to established charting principles, Brandt noted that he avoids trading during periods of price consolidation without a clear trend, opting to wait until a pattern is definitively completed.
A discussion ensued among crypto enthusiasts following Brandt’s analysis, with one individual proposing the term “descending broadening wedge” as a better descriptor. Brandt responded by reaffirming his preference for the terminology set forth by Schabacker, Magee, and Edwards, seminal figures in the realm of classical charting. Recognizing the diversity of terms used in technical analysis, Brandt maintained his stance on using historical definitions.
Adding to the conversation, another crypto community member mentioned that Bitcoin has been in a holding pattern for over a year, aligning with Brandt’s observation that it may not be an optimal time for trading. The analyst reiterated his focus on risk management, underscoring the importance of following his established trading strategies.
A third member suggested the pattern might be a “bullish megaphone or bull flag,” but Brandt disagreed, clarifying that the current formation does not meet the criteria defined by classical charting founders for such a label. This highlights the intricacies and nuances involved in technical analysis, particularly when employing time-tested methodologies.
In a subsequent post, Brandt elaborated on the efficacy of classical chart patterns in trading, noting their resolution in three distinct manners. He detailed that, often, such patterns diverge from initial expectations 50% of the time. In 25% of the cases, while the breakout occurs in the anticipated direction, the movement fails to sustain, leading to reversals. Only in the remaining 25% do the patterns break out as predicted and achieve the projected targets.
Brandt’s insights emphasize the complexity and unpredictability inherent in chart analysis, making clear the importance of cautious and well-informed trading decisions in the volatile world of cryptocurrencies.
