Bitcoin was hit by a sharp correction from its all-time high at $73,750. Thus, it witnessed one of the most significant declines this year. However, it later recovered and started to consolidate around 64 thousand dollars. Some analysts expect further correction while others point north. Legendary analyst Peter Brandt, who knows every step of Bitcoin, draws attention to a formation for BTC.
Peter Brandt pointed out a reversal pattern!
Veteran trader and analyst Peter Brandt recently highlighted an intriguing pattern that is currently being built on the Bitcoin chart, sparking interest and debate among traders and investors. Brandt shared a screenshot of the four-hour Bitcoin price chart. In this context, it showed a rising trend line and what appeared to be a slowly emerging head and shoulders pattern.
Brandt’s post caught the attention of an X user. The user asked if this was a “head and shoulders” formation. Brandt responded, “It’s starting to take shape that way.” The head and shoulders pattern is a well-known technical indicator that predicts a trend reversal. Analysts distinguish it by three peaks. These are: The middle vertex (head) is the highest and the two outer vertices (shoulders) are lower and approximately equal in height. When this pattern follows an upward trend, it is often considered a bearish trend indicator.
Is Bitcoin on the verge of a price correction?
Confirmation of such a formation indicates that Bitcoin is on the verge of a price correction after its recent rally. According to experts, this could provide an entry opportunity for investors looking to buy at lower prices. The crypto community is watching Bitcoin’s price with bated breath. The exact results of the pattern identified by Brandt remain subject to interpretation. It remains to be seen whether this will lead to a downward trend or defy expectations.
What do options show for Bitcoin?
At the time of this writing, Bitcoin is up 3% in the last 24 hours to $65,542. However, it still remains in the 2.5% red zone on a weekly basis. Bitcoin’s latest pullback contrasts with this week’s stock market rally as investors became more optimistic that the Federal Reserve would cut interest rates this year.
Meanwhile, demand for U.S. exchange-traded funds with exposure to cryptocurrency has begun to decline. Options also show that investors are ready for a prolonged decline in Bitcoin. According to Bloomberg, based on Deribit data, Bitcoin put options that expired on March 29 outperformed call options in terms of volume, increasing the put/call ratio, which is an important indicator of market sentiment. Thus, it indicated a bearish view in the short term. Strike prices for puts range from $50,000 to $45,000. This is lower than Bitcoin’s current price of around $65,000.
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