Renowned trader Peter Brandt recently took to Twitter to point out two significant unfilled gaps in Bitcoin's chart. He cheekily encouraged traders to short BTC, implying that the digital asset might experience a downward move in the near future. This notion is based on the gaps theory in trading, which suggests that every gap in the market should eventually be filled.
Gaps are spaces in a chart where an asset's price moves sharply up or down without any trading occurring between these price levels. They often occur due to a significant shift in market sentiment or the release of critical news. According to the gaps theory, the market will eventually return to these unfilled areas and fill the gap, leading to a reversal in price.
Two huge unfilled gaps. I encourage you hot shot young guns to go short $BTC pic.twitter.com/YVDiEhhifD— Peter Brandt (@PeterLBrandt) March 19, 2023
In the case of Bitcoin, the recent move toward $27,000 has been driven by a wave of liquidations following the collapse of SVB bank and an ensuing bank run. This turmoil in the traditional financial sector has prompted many investors to turn to cryptocurrencies as a safe haven, protecting their assets from the market crash fueled by the failure of banks.
However, Brandt's observation of the unfilled gaps suggests that Bitcoin might not be immune to a potential downward move. If the gaps theory holds true, the market might return to these levels, leading to a decline in Bitcoin's price. It is essential for traders and investors to keep a close eye on the market and be aware of the potential implications of these gaps.
While Bitcoin has been a popular choice for investors seeking refuge from the market turmoil, it is crucial to approach the market with caution and consider the possibility of a downward move. As always, the volatile nature of cryptocurrencies makes it essential for traders and investors to conduct thorough research and be prepared for sudden changes in the market.