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Legendary Trader Peter Brandt Spotlights Intriguing Formation on Bitcoin Chart

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Fri, 19/01/2024 - 11:47
Legendary Trader Peter Brandt Spotlights Intriguing Formation on Bitcoin Chart
Cover image via www.youtube.com

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In a new tweet, legendary trader Peter Brandt highlights an intriguing trend on the Bitcoin price chart, saying that his attention has been drawn to a series of higher highs in BTC with divergence from RSIs.

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In simpler terms, a divergence refers to discrepancies between the market trend and the behavior of technical tools, which are most often momentum indicators. A divergence could suggest when the market's momentum might be about to change direction.

Brandt, noting his partial reliance on indicators but more on the price, asks his followers what their thoughts could be on the observation that was pointed out.

A crypto trader, "Cheds," replying to Brandt's tweet, stated that the observation might refer to a hidden bullish divergence, where lower lows in the RSI coincide with higher lows in the price. This happens when the price has retained its gains while the RSI has reset, and there is room to run as a bounded oscillator, he added.

If this is the case, the upward price movement for Bitcoin might be expected to continue, although this possibility remains unknown.

Bitcoin price dips

Cryptocurrencies fell on Thursday, with Bitcoin dropping back to around $40,000. Bitcoin recently traded at $41,167.14, down 3.84%, according to CoinMarketCap data. Earlier, it dropped as low as $40,601.37, its lowest level since Dec. 18.

The rest of the cryptocurrency market also tumbled alongside Bitcoin. Analysts believe the market is still in a correction following the ETF launch, with short-term traders and large Bitcoin holders selling heavily in a risk-off environment.

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Bitcoin has dropped roughly 16% since its peak of approximately $49,000 reached in the wake of 11 ETF approvals in the last week.

According to Santiment, bearish sentiment and the inevitable sell-offs from novice traders might likely allow for a market rebound from patient opportunists who continue to accumulate during lower price levels.

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