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Legendary trader Peter Brandt has pointed out a key pattern on the Bitcoin (BTC) chart. He draws attention to a "pennant" or "flag" pattern on the Bitcoin chart, which he claims has short-term bearish implications.
Pennants are continuation patterns that traders frequently utilize to forecast future market movements.
This is known as a pennant or flag and has short term bearish implications unless negated by close above mid point highs. $BTC pic.twitter.com/kLz6aTHMrz
— Peter Brandt (@PeterLBrandt) May 24, 2023
This implies that Bitcoin might further its downward trip if this pattern holds. The escape route, according to Brandt, is if this pattern is negated by a close above midpoint highs.
As reported, the veteran trader predicted that Bitcoin might see one more shakeout break and then thrust higher.
In an earlier tweet today, Brandt sounded a note of caution. He points out that charts and technical analysis are not reliable for price forecasting.
"Shocking news just in. Charts and technical analysis are NOT reliable for price forecasting. To you hot shots who think you have something magic, let’s hear from you in 10 years," Brandt tweeted.
Bitcoin nearing historic oversold levels
Following a market-wide slump in cryptocurrencies, Bitcoin fell below the $27,000 mark as traders in broader equities markets reacted to weak U.K. inflation data.
The core Consumer Prices Index (CPI) rate for the United Kingdom was hotter than anticipated and came in at 6.8%, the highest level since 1992, compared to an expected figure of 6.2%.
At the time of writing, Bitcoin was down 2.11% in the last 24 hours to $26,703.
According to a recent Glassnode analysis, Bitcoin might be nearing historically oversold levels. It gives the reason that the aMVRV is currently recording a value of 1.09, indicating that just 9% of unrealized profit is still present on the market.
"This is coincident with what were historically oversold levels in both the 2018, 2019 and March 2020 cycle lows," Glassnode stated.
The Adjusted MVRV Ratio increased to a value of 1.21 following the latest Bitcoin rally above $30K, indicating that a fairly modest 21% unrealized profit level was attained.