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Veteran trader Peter Brandt recently pointed out an intriguing price pattern emerging in Bitcoin (BTC). In a recent tweet, Brandt shared his perspective on chart analysis, pointing out that Bitcoin’s price action exhibits an inverted or expanding triangle pattern.
Brandt revealed his disciplined approach to trading, saying, “I don’t trade opinions. I trade setups using classic chart principles. I avoid trading when the price is in a range. I enter completed patterns.”
“BTC is showing what is called an inverted or expanding triangle,” Brandt added.
A triangle is a chart pattern represented by trend lines along a converging price range, indicating a pause in the prevailing trend. Technical analysts categorize triangles as continuation patterns of an existing trend or a reversal.
Bitcoin (BTC), the largest cryptocurrency by market cap, experienced a sell-off during Sunday’s trading session. The sell-off continued and Bitcoin hit an intraday low of $57,663 on Monday.
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At the time of writing, BTC was down 2.09% over the past 24 hours at $59,450, after hitting a high of $62,755 on Thursday.
Here is the warning part
Although the expanding triangle pattern on the Bitcoin chart is notable, Brandt issued a warning: “No breakout yet, so no trading.”
Although the triangle pattern is a continuation pattern, traders are often advised to look for breakouts before opening or closing a position.
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This is because in technical analysis, a breakout from a pattern often indicates the beginning of a new trend, but the direction of the movement remains speculative until that breakout occurs.
The expanding triangle pattern suggests that Bitcoin may be preparing for a potentially significant move, but without a confirmed breakout, the direction of that move remains unknown.
Peter Brandt’s warning underlines the importance of being patient and not making hasty decisions, but waiting for confirmation before entering the trade.
