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Veteran market trader Peter Brandt agrees the ongoing Bitcoin turbulence could be a bear trap, but stresses how unreliable charts can be.
Bitcoin’s recent slump has triggered multiple analyses, with differing opinions on its future trajectory. Renowned market expert Peter Brandt drew attention to the price drop, but suggests it might be a bear trap rather than a sign of prolonged bearishness.
Bitcoin Drop to $73K Possible but Not Certain
Notably, Brandt rooted his initial analysis in Bitcoin’s historical behavior during similar patterns, with a focus on the potential formation of a Head and Shoulders (H&S) pattern on the daily chart.
Brandt noted that while this H&S pattern could theoretically push Bitcoin prices down to $73,000, it might also fail to materialize. According to him, Bitcoin charts tend to evolve unpredictably, eventually morphing into new formations.
The market analyst noted that this makes them unreliable as precise predictors of future prices. However, Brandt stressed that the true value of chart analysis lies in timing trading opportunities instead of predicting definitive trends.
For context, Brandt’s accompanying chart shows Bitcoin’s price movements featuring cycles of pumps and dumps. The notable levels to watch include $88,065.56 and $73,018.86 during corrective phases.
The chart highlights increased volatility through a high Average True Range (ATR), while the trend strength remains moderate, as indicated by an ADX reading of 16.97. Bitcoin has dropped below the 8-day MA ($96,935) and the 18-day MA ($96,073), showing bearish pressure.
A Bear Trap?
Meanwhile, analyst Nilesh Rohilla responded to Brandt’s observations. Rohilla suggested that traders prioritize time-based strategies over price-focused predictions.
He presented his analysis, which pointed to Bitcoin’s recurring trends tied to events like the halving cycle and the U.S. presidential election. According to him, Bitcoin exhibits major movements 18 months after the halving or 12 months after the presidential elections.
Rohilla’s chart shows Bitcoin consolidating within an extended orange channel for most of 2024 before breaking out in November. The price repeatedly tested resistance at the top and support at the bottom before this breakout.
This breakout led to a new pullback pattern, highlighted by a green circle, and shows a trend observed in late 2023 before the initial run in Q1 2024. Currently, Bitcoin has entered into a similar pullback pattern, and Rohilla expects a breakout from here to lead to massive gains.
Data from his chart shows that Bitcoin could climb to $135,000 in the coming months, following similar historical trends. Interestingly, last October, Brandt identified the $135,000 mark as Bitcoin’s possible top for this cycle.
Brandt acknowledged Rohilla’s analysis, agreeing that Bitcoin has often exhibited bear traps during its long-term uptrends. A bear trap occurs when the market gives false bearish signals, luring traders into short positions before sharply reversing upward.
Yes, we have seen this type of construction as a bear trap numerous times in Bitcoin https://t.co/sYb7Smb9Nu
— Peter Brandt (@PeterLBrandt) January 9, 2025
This behavior has been a recurring feature of Bitcoin, particularly in strong bull markets. Notably, Brandt earlier suggested that he expects the circled corrective patterns from Rohilla’s chart to materialize in August to September 2025. Currently, BTC trades for $93,984, down 2.77% in the last week.