Veteran commodities trader Peter Brandt asserts that the Bitcoin price has formed “a classic top pattern.”
The crypto market has been thrown into uncertainty over the past few weeks as macroeconomic factors have subdued Bitcoin‘s price.
With these price struggles sparking concerns about the fate of the bull market, a veteran trader has now highlighted that the asset has formed a top pattern. Is the bull market over?
Bitcoin Head and Shoulders Pattern
Veteran commodities trader Peter Brandt recently asserted that Bitcoin’s price has formed “a classic top pattern.”
Brandt disclosed this in an X post on Sunday, January 12, highlighting a head and shoulders pattern on the asset’s daily candle chart that started forming toward the end of November 2024. The veteran trader noted that the chart pattern with a neckline just above $90,000 and a potential target around $75,000 could have three possible outcomes.
BTCUSD daily candle chart highlighting head and shoulders pattern Source Peter Brandt
For one, he suggested that Bitcoin could fulfill the pattern by breaking the neckline and selling off towards the $75,000 target.
On the other hand, he noted that it could turn out to be a bear trap. This will likely see the asset’s price briefly break below the neckline only to quickly reverse course after taking out short sellers.
At the same time, he asserted that the chart pattern could grow into an even bigger structure.
History Favors a Bear Trap?
It is not the first time Brandt has highlighted Bitcoin’s potential head and shoulders pattern in the past few days. On Thursday, January 9, he noted that the pattern has often resulted in a bear trap in Bitcoin’s history.
This view is based on the Brandt-identified and named Bitcoin bull market correction pattern, the “hump slump bump dump pump” or hump slump for short.
The pattern sees the asset form something similar to a head and shoulders pattern, only to result in a bear trap before continuing its parabolic run.
On December 29, the analyst suggested that Bitcoin was likely repeating this pattern but needed a deeper correction. This deeper correction could be satisfied by a bear trap that sees the asset briefly break below the neckline around $90,000.
For context, Bitcoin is currently trading at $93,900, down over 5% in the past seven days.
