- Bitcoin price pulled back this week but one legendary trader, Peter Brandt, remains optimistic about its longer-term outlook
- The weekly chart shows a bullish pennant pattern for Bitcoin, indicating potential for a strong upward breakout in the coming weeks
- A breakout could occur ahead of Donald Trump’s inauguration on January 20, with a key target level of $122,000 based on the depth of the cup-and-handle pattern
Despite the recent downturn in Bitcoin‘s value, renowned trader Peter Brandt remains positive about its prospects. This week, Bitcoin experienced a dip, falling from its record high of 108,200 to below 95,000, primarily due to concerns over the bond market.
The Impact of Bond Market on Bitcoin Price
The decline in Bitcoin’s price this week is largely attributed to the turmoil in the United States bond market. On Tuesday, Bitcoin plummeted as U.S. bond yields soared to their highest levels in over two years, following the release of stronger-than-expected job vacancy data. The bond market sell-off continued on Wednesday, pushing 30-year and 10-year yields to 4.95% and 4.70% respectively. This increase in yields suggests that the market expects the Federal Reserve to maintain its hawkish stance throughout the year.
Bitcoin’s Role Amid Changing Market Conditions
The market’s sentiment towards Bitcoin has shifted, with its value now closely tied to risk-on, risk-off asset dynamics. This change comes amid signs that the U.S. Federal Reserve may keep interest rates elevated for longer than previously expected. Several analysts speculate that bond yields could continue to rise as inflationary pressures persist, largely due to policies under the Trump administration including deportations, tariffs, and tax cuts. These factors could potentially impact both stock and crypto markets.
Trader’s Optimism Amid Potential Market Volatility
Despite acknowledging the potential for near-term volatility due to bond market concerns, legendary trader Peter Brandt remains optimistic about Bitcoin’s longer-term outlook. He observed that Bitcoin appears to be forming a head-and-shoulders pattern, a potential indication of further fluctuations.
The Implications of Bitcoin’s Weekly Chart Analysis
The weekly chart suggests that Bitcoin may see an upside in the coming weeks. This chart shows a cup-and-handle pattern, a classic sign of bullish continuation. Bitcoin broke out of the handle section in November, reaching a record high of 108,200 in December. Currently, Bitcoin is forming a bullish pennant pattern just below the key resistance level of 100,000. Such consolidations near major psychological levels are common before significant upward moves.
Outlook for Bitcoin’s Value in the Near Future
If a strong breakout occurs in the coming weeks, potentially ahead of Donald Trump’s inauguration on January 20, the key target level to watch will be 122,000. This estimate is based on measuring the depth of the cup and projecting it upward from the breakout point. Consequently, despite recent market fluctuations, Bitcoin’s trajectory appears to be on an upward trend.
Conclusion
In conclusion, despite the recent downturn in Bitcoin’s value and the impact of external factors such as the bond market and Federal Reserve policies, industry experts like Peter Brandt remain optimistic about its future. Bitcoin’s chart analysis also points to a potential upswing in its value in the coming weeks, further strengthening the bullish sentiment around this cryptocurrency.
