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 ( $42,084.00 ) 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 ( $42,084.00 ) 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 ( $42,084.00 ) 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 ( $42,084.00 ) 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.