Peter Brandt, a seasoned futures trader with nearly five decades of market experience, has raised concerns about Bitcoin (BTC) as the cryptocurrency revisits levels not seen since early this year. Bitcoin recently traded at $63,735, marking a significant decline of 3.08% in the last 24 hours, placing it perilously close to the lows recorded in February.
In February, Bitcoin’s price dipped to around $62,853 amid escalating tensions between the United States and Iran, which negatively impacted risk assets across numerous markets. Following this downturn, Bitcoin experienced a gradual recovery, reaching a peak of slightly more than $83,000 in early May. However, recent trends suggest a notable regression as the price retraces to those February lows.
Brandt’s warning is primarily based on a chart pattern he identified on June 2, involving CME Micro Bitcoin Futures. He referred to this pattern as “expanding triangles,” which he considers to be a dependable indicator of market movements. The chart, according to Brandt, indicates a significant bearish trend. After hitting February lows, Bitcoin had spent months climbing within a rising channel, only to recently breach the lower edge of this structure and close below its moving average, which is seen as a bearish signal.
Brandt’s analysis suggested that the price could potentially drop to around $56,000, a target derived from the height of the pattern from its breakout. He noted, however, that a price surge back above $75,000 would prompt him to revise his outlook.
By June 3, the bearish setup had become more pronounced, with Bitcoin slicing through the lower boundary of the rising channel and plunging to $63,572. Brandt emphasized this drop as a significant downside marker, suggesting that Bitcoin has already reached its initial target from February’s low but remains vulnerable to further declines. He forecasted that no substantial low point may emerge until October.
Bitcoin’s current trading position places it below both its short- and long-term moving averages. Specifically, the 8-period moving average crossed under the 18-period moving average, a classic bearish momentum signal closely monitored by chartists. Additionally, the Average Directional Index (ADX), which assesses the strength of a trend, exhibited a notable change during this timeframe. Initially, the ADX was below 20, indicating a weak trend, but it surged to above 36 shortly thereafter, reflecting an established downtrend. Since a reading above 25 signals a strong trend, the rising ADX during this downtrend reinforces the possibility of further price declines, suggesting that any significant market recovery may still be months away.
