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Veteran trader Peter Brandt said he bought Bitcoin (BTC) after a technical pattern he had previously viewed as bearish changed direction, reversing a cautious stance he held earlier this month.
On Aug. 20, Brandt said on X that Bitcoin had been forming an inverted head-and-shoulders pattern, a chart formation traders often interpret as a possible bottom.
In simple terms, the pattern on his chart shows Bitcoin making three major lows, with the middle decline deeper than the two on either side. A breakout above the horizontal resistance line, known as the “neckline,” can signal that sellers are losing control.
“The completion of the H&S bottom changed that. I bought the breakout for better or worse,” Brandt wrote.
Brandt said the unfinished pattern previously had a “60/40 chance” of breaking lower because Bitcoin was still trending down and its final, or right, shoulder had taken unusually long to form.
The trade marks a shift from Aug. 9, when Brandt’s chart pointed toward a possible Bitcoin decline to roughly $58,000.
Brandt has traded commodities for more than five decades and is best known for calling major market reversals. In 1980, after gold surged to a record near $850 an ounce, he turned bearish before the metal entered a prolonged collapse that ultimately erased more than half its value from the peak.
He later made a similarly notable Bitcoin call. In January 2018, with Bitcoin still trading above $10,000 after its 2017 boom, Brandt predicted the cryptocurrency could fall below $4,000. By December that year, Bitcoin had dropped to roughly $3,200, validating the direction of his bearish forecast.
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Bitcoin rally forces traders to reconsider bearish bets
Brandt’s purchase comes after Bitcoin sharply reversed months of weakness this week.
The rally accelerated after the U.S. Treasury saidon Aug. 19 that it would at least double some long-dated Treasury buybacks, while President Donald Trump separately reiterated his supportfor crypto legislation at a White House meeting with industry executives.
Bitcoin has gained more than 20% for the week, its strongest weekly performance in more than three years.
The move has also triggered a large short squeeze. CoinGlass recordedabout $1.49 billion in crypto liquidations over the past 24 hours, including roughly $1.19 billion in short positions, meaning traders betting on further price declines were forced out as prices rose.
Source: finance.yahoo.com