Bitcoin, the largest cryptocurrency by market value, recently reached $63,000, and veteran trader Peter Brandt has weighed in on this bullish price movement.
Bitcoin is on track for its fourth consecutive day of gains, reaching highs of $63,293 in today's trading session after recovering from Friday's lows of $56,538.
According to Brandt, Bitcoin (BTC) might be unfolding its often-repeated "Hump Slump Bump Dump Pump" chart construction, a pattern he had observed in the past.
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"Bitcoin BTC could be unfolding its often-repeated Hump Slump Bump Dump Pump chart construction," Brandt wrote in a tweet, suggesting Bitcoin's price action might be following a defined pattern.
Bitcoin $BTC could be unfolding its often-repeated Hump...Slump...Bump...Dump...Pump chart construction. Jul 5 attempt at double top was bear trap, confirmed by Jul 13 closeMost likely scenario now is that bears are trappedClose below $56k negates this interpretation pic.twitter.com/jQZn8GGrS2
— Peter Brandt (@PeterLBrandt) July 15, 2024
This chart construction is characterized by a "Hump," or price increase, followed by a "Slump," or price drop. The "Bump" phase shows a price rise, followed by a "Dump," which is another dip. Finally, the "Pump" phase represents major upward movement, frequently resulting in new highs.
Bitcoin bears trapped?
Brandt added that the "July 5 attempt at double top was bear trap, confirmed by July 13 close. Most likely scenario now is that bears are trapped. Close below $56,000 negates this interpretation."
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On July 5, according to Brandt, Bitcoin attempted to form a double top, a bearish pattern that led to lows of $53,499. However, Brandt identified this as a bear trap, a false signal that misleads traders into believing the price will continue to fall. This view is not farfetched, as Bitcoin had fallen for days ahead of this date.
However, a positive close on July 13 invalidated the double top. Brandt suggests that the most likely scenario now is that bears are trapped. This interpretation suggests Bitcoin might continue its upward trajectory.
However, Brandt notes that a close below $56,000 would negate this bullish outlook, thus remaining a key level for traders to monitor. At the time of writing, BTC was up 5.05% in the last 24 hours to $62,642.
