If we are to believe the latest analysis by investment legend Peter Brandt, bitcoin has reached the potential bottom of the bear market. This is because bitcoin has finally hit the last target of the pattern drawn by Brandt. However, attaining this target does not mean the market is suddenly bullish, and Brandt does not even rule out a further fall.
Rising triangle
From mid-July, an ascending triangle began to form on bitcoin’s daily chart. With Friday’s declines, we have convincingly broken through that triangle, and bitcoin has found its potential bottom. A rising triangle is often a pattern in which the market consolidates and prepares for the next volatile move.
For all practical purposes the target of the rising wedge in Bitcoin $BTC has already been met. That is not a reason per se to be bullish and it does not mean BTC cannot go lower yet pic.twitter.com/fB3sGa9e6o
— Peter Brandt (@PeterLBrandt) August 20, 2022
The volatile movement is clearly there, but unfortunately, to the downside. How far bitcoin can fall is not clear. According to Brandt, it is possible that bitcoin will fall even further than its current price of $21,400. If that happens, then even the provisional low of $17,600 in this bear market is potentially in danger.
If we lose that price, things could get very dark for bitcoin. But before that happens, the digital currency will have to record significant losses. Anything is possible in this market, but the support around this price level seems more than solid. Although, we have thought about that more often in recent months.
What can we expect now?
Basically, bitcoin is currently in a no man’s land on the chart. Both the bulls and the bears need to take stock and determine their strategy for the coming period. In any case, a large part of the bulls was spooked by last Friday’s downward move, as margin traders had bet on further rises in large numbers.
With last Friday’s decline, the bulls also had to give up the 50-day moving average, and we seem to be back in a downward trend. Hopes that the bear market is already over can, therefore, be put on ice again. The bear is still very much alive and before the bulls can plant their flag, we really need to move towards USD 30,000.
As long as that does not happen and the macroeconomic climate does not clear up further, it is difficult to maintain that we have perhaps started a bull market or, at least, that the bear market has ended. Buckle-up seems to be the best advice for the coming weeks.
