As legendary trader suggests, first cryptocurrency reset last weeks’ performance
According to an analysis shared by a veteran trader Peter Brandt, Bitcoin has finally reached the pattern’s target it has been forming since the middle of July. The price performance does not mean that the market should become extremely bullish, and it also does not mean that BTC won’t drop even lower, says the trader.
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.
For all practical purposes the target of the rising wedge in Bitcoin $BTC has already been met. That is not a reason per se to be bullish and it does not mean BTC cannot go lower yet pic.twitter.com/fB3sGa9e6o
— Peter Brandt (@PeterLBrandt) August 20, 2022
As the consolidation period comes to conclusion, the market is seeing a rapid spike in the trading volume and volatility, which causes a swing up or a plunge down. In our case, the market decided to push BTC lower, causing it to drop to the July level.
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.
Following the drop below the lower border of the wedge, Bitcoin has also plunged below the 50-day moving average, which means that the asset has returned to the deep downtrend and needs great support of investors to get back up.
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, with around a 1% price increase in the last 24 hours.