Bitcoin price is currently consolidating above $31,000 after another key recovery from lows of $29,241. Up to today, bitcoin is yet to close below the $30,000 level since its breakout towards its all-time highs. This level has now become extremely strong. But, despite the strong defense of that level, Peter Brandt says that Bitcoin could plunge towards $25K.
Currently, Brandt says that bitcoin price action is challenging to predict. In his latest analysis, he said that nobody knows where bitcoin will decide to go next. Will it be $50,000 or $20,000? Nonetheless, in the 2015-17 bull run, there was a notable pattern that was repeated multiple times.
History question for the #Cryptotwitterites of the world
Does anyone remember this Jan 8, 2018 Tweet, just before the parabolic advance was broken?
A derivative of the BHLD is the Hump..Slump..Pump..Dump.
It takes really old traders to come up with chart names such as this. pic.twitter.com/gcm2nsbq18
— Peter Brandt (@PeterLBrandt) January 20, 2021
Bitcoin was seen to have repeated 30% or more corrections and the legendary trader highlighted a pattern known as Hump, Slump, Pump and Dump (HSPD). Brandt believes that this pattern was seen many times in the last bull run and it appears to be repeating itself.
Based on the HSPD pattern, the Slump happened at $25,343. Another market low below that point may fulfill the Hump-to-Dump sequence. Brandt stated:
“In fact, a low and close today below the Jan 21 close would flip the Daily Trend Model to down. As I have also pointed out over the past two years, the Factor Daily Trend Model is fickle during congestions, turning UP near the upper end of a trading range and DOWN near the bottom of a trading range. A decline to below the Jan low would represent a 34% correction, in line with the nine 30%-plus corrections during the 2015-2017 bull run.”
In the meantime, the In/Out of the Money Around Price (IOMAP) chart indicates that there is a strong support zone that has formed between $30,300 and $31,300. Within this zone, around 614,000 addresses bought over 506,000 BTC. A strong break below this area might push bitcoin down to the Slump level located at $25,000.
Nevertheless, the chart also shows that resistance above $31,000 is quite scarce. The zone between $31,300 and $32,300 is the strongest with around 267,000 BTC in volume. A sustainable breakout above this area may push bitcoin up towards the next resistance level located at $35,000.
Many bitcoin price predictions have come up in recent weeks with bitcoin proponents convinced that a $50,000 price is achievable in the mid-term. On the other hand, the critics say that the bitcoin market is just another bubble that is waiting to implode violently. Which direction will bitcoin go to next?