Peter Brandt’s Crypto Update
The Crypto Corner
The daily trend remains down. The dominant chart construction continues to be the large symmetrical triangle. The current decline is testing the lower boundary of this pattern. This is not immediately a constructive factor. This triangle could be resolved in one of at least four ways.
- A downside breakout with a target at 3650.
- A downside breakout that proves to be an enormous bear trap.
- A reversal pattern leading to the next thrust in Bitcoin’s historical bull trend.
- Continued morphing with fake-outs in both direction.
Let me focus on option #3. The reality is that prices are coiling with a contraction of volume. This indicates that supply (selling pressure) is drying up – although a decline through the lower boundary of the triangle on expanded volume would be negative. But so far the lower boundary is holding – and to become constructive BTC needs to display signs of bottoming. And this could happen.
The decline from the May 5 high has taken the form of a channel. An upside completion of this channel would be a minor chart buy signal. More importantly, a small H&S bottom is forming, as shown by the 4hour graph. I prefer H&S patterns to be symmetrical in duration and height. Another test of 7269 would be nice to see. In terms of duration, a sideways drift until Sunday afternoon at 10:00 AM Mountain Time would provide equal balance between the two shoulders. I am not predicting the above scenario – it is something to watch so I am prepared to act. The best-case scenario would be the simultaneous penetration of the channel and completion of the small H&S bottom. I'm flat – and carefully monitoring BTC. By the way, the volume shown is the composite of five of the most liquid exchanges.
The daily trend in ETH is down. The H&S top has targets of 496 and 452. In my opinion ETH will be burnt toast if BTC breakouts out of the bottom of its symmetrical triangle.
The trend is down. Litecoin is testing the lower support line of a symmetrical triangle. It is extremely important that LTC holds support at 109. A deciscive penetration of this support would establish a target of $53.
The most bearish chart belongs to XMR. A decisive completion of the descending triangle top would produce a profit target of $65.
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