Veteran crypto analyst, Peter Brandt has uncovered an inverted or expanding triangle pattern in Bitcoin (BTC). Utilizing classical charting principles, Brandt analyzes the technical pattern formation, highlighting its potential impact on Bitcoin’s price trajectory.
What Bitcoin’s Inverted Triangle Pattern Means
On August 12, Brandt took to X (formerly Twitter) to shed light on a recent pattern formation in Bitcoin’s price chart. Sharing a price chart illustrating Bitcoin’s price movements from May 2023 to November 2024, the analyst identified a singular inverted or expanding Triangle pattern in Bitcoin.
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Source: X
Often, triangle-like shape patterns on the Bitcoin chart can indicate either a continuation or a reversal for Bitcoin’s price movements. The pattern depicted in Brandt’s post features two descending trend lines which might be diverging from each other.
Brandt explains that while this pattern might be misconstrued as a bullish signal, the absence of a breakout means he wouldn’t be making any trades right now. He emphasized that he doesn’t make trades based on opinions but on established chart patterns.
The crypto analyst further mentioned that he avoids trading when a price is range-bound with no clear trend and only enters trades when a pattern is accomplished.
After Brandt described Bitcoin’s chart pattern as an inverted or expanding triangle, a crypto member proposed that it might be higher described as a “descending broadening wedge.” Brandt responded by explaining that despite the range of names for patterns, he prefers to make use of the terminology established by Schabacker, Magee, and Edwards, who’re considered the founders of classical charting.
Concurring with Brandt’s view that “no breakout yet, so no trade,” a crypto community member noted that Bitcoin has been in a hold position for over a yr, suggesting that it might not be the fitting time to trade. Brandt agreed but emphasized that, as a trader, he prioritizes risk management and prefers to not go against his established trading strategies.
A final crypto member suggested that the inverted or expanding triangle pattern in Bitcoin could also be a “bullish megaphone or bull flag.” Brandt responded by clarifying that, while some might label the pattern as a bull flag, it doesn’t align with the definitions set by the founders of classical charting.
Insights On Brandt’s Classical Charting Principles
In a newer X post, Brandt discussed intimately the effectiveness of using classical chart patterns for trading. He revealed that when classical chart patterns are identified, they’re resolved in three distinct ways.
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Brandt noted that these patterns often morph into something unexpected 50% of the time, failing to follow initial predictions. He added that 25% of the time, classical chart patterns breakout within the anticipated direction but then fail to sustain movement, resulting in a reversal or loss. Lastly, within the remaining 25% of cases, the patterns break out as predicted and move towards the projected goal, fulfilling the anticipated scenario.
BTC price below $59,000 | Source: BTCUSD on Tradingview.com
Featured image created with Dall.E, chart from Tradingview.com