dailyhodl.com
The veteran trader who accurately called Bitcoin’s 2018 meltdown is issuing a fresh warning that a severe correction could be looming for BTC.
Seasoned market analyst Peter Brandt tells his 651,800 Twitter followers Bitcoin must recover its May 31st high of around $32,000 to avoid the risk of a massive capitulation event.
“Unless Bitcoin (BTC) can close above the May 31st high, this chart could become a textbook example of the famed ‘Drano’ chart pattern.”
Looking at Brandt’s chart, Bitcoin appears to have broken down from a big sideways channel and his next reliable support on the weekly timeframe is around his target at $12,700.
At time of writing, Bitcoin is changing hands for $21,758, down over 16% in the last 24 hours. A move to Brandt’s target suggests a downside risk of over 40% for BTC.
Brandt also says he agrees with the idea that a purge is possible. But over the long-term, he still believes that BTC will make a fresh all-time high.
“In my opinion, we will not make a new all-time high until early 2024 but by then we will be in a giant uptrend.”
The veteran trader is also keeping a close watch on the US dollar index, which he says is threatening to take out its long-term resistance at $106.
“The US dollar could be poised for a big run. If $106 is breached, the chart target would become $119.”
Traders rely on the US dollar index to gauge investor sentiment. A strong USD suggests that investors are selling risk-on assets like equities and crypto in a flight to the safety of the US dollar.