As legendary trader suggests, first cryptocurrency reset last weeks’ performance
As per the analysis shared by an experienced trader Peter Brandt, Bitcoin has finally reached the target of the pattern it has been forming since mid-July. The trader says that the price performance does not mean that the market should be very bullish, and it also does not mean that BTC will not drop further.
Rising wedge pattern
Back in July, after a massive 25% plunge, Bitcoin entered a rising wedge, which often acts as a cooldown pattern during amplitude trends. With assets entering consolidation channels or ascending and descending wedges, traders and investors take their time to accumulate or redistribute their funds prior to a volatile move.
As the period of consolidation comes to an end, the market is seeing a sharp jump in trading volume and volatility, which causes a swing or a downtrend. In our case, the market decided to short BTC, causing it to drop to July levels.
According to Brandt, the target of the pattern has been reached, which means Bitcoin is now moving without looking back at the formation that was present on the market for the last few weeks.
What will happen next?
Bitcoin has also dropped below the 50-day EMA after falling below the lower boundary of the wedge, which means the asset has returned to a deeper downtrend and needs massive investor support to recover.
According to institutional net flows, large investors were actively selling their holdings, which fueled the drop. The behavior of institutional investors was similar to what we saw during the 3AC dump.
At press time, bitcoin is trading at $21,318, up almost 1% over the past 24 hours.
