Market Veteran Brandt Identifies Bitcoin Lower Lows Amid Economic Tensions: Where to Next?

Veteran trader Peter Brandt identifies a series of lower highs and lower lows that has plagued Bitcoin amid geopolitical and economic tensions.

Bitcoin (BTC) has been facing a downward trend since July 29 after it hit a high of $70,016. This downtrend has triggered three consecutive days of declines for the premier cryptocurrency, with the bears threatening to engineer another intraday loss today.

Bitcoin Records Lower Highs and Lower Lows

Amid the recent collapse, Brandt recently identified a broader trend of lower lows and lower highs that Bitcoin has been subjected to in recent times. His recent analysis highlights the bearish signals in the cryptocurrency market.

Brandt’s chart illustrates Bitcoin’s struggle to maintain higher levels, with a clear pattern of declining peaks and troughs. In addition, the 8-day MA recently crossed below the 18-day MA. This crossover is often interpreted as a bearish signal, suggesting continued downward pressure on Bitcoin’s price.

Meanwhile, volume analysis also supports the bearish outlook. Recent trading volumes have been lower than the 20-day moving average, indicating waning interest and potentially weaker support for higher prices. The Relative Strength Index (RSI) stands at 49.46, which is close to the neutral zone but leaning slightly towards bearish territory.

Notably, the pattern of lower highs and lower lows indicates that sellers are dominating the market. If Bitcoin fails to hold the support level around $62,446, it could see further declines. Conversely, a break above recent resistance levels could signal a potential rebound, but the overall trend remains bearish for now.

Factors Behind the Latest Market Crash

Recent market downturns are attributable to geopolitical tensions. There have been reports indicating that Iranian authorities are considering a retaliatory strike against Israel in response to the assassination of a Hamas leader in Tehran.

This development has raised the threat of a wider conflict in the region, causing increased market volatility and prompting investors to seek safer assets.

Moreover, the Federal Reserve’s choice to keep benchmark interest rates unchanged has contributed to market anxiety. Fed Chair Jerome Powell indicated that no decisions have been made regarding a rate cut in September, leaving investors uncertain about the future course of monetary policy.

Brandt Maintains Bullishness on Bitcoin

Despite the current bearish trend, Brandt had previously expressed a bullish long-term outlook for Bitcoin. In his analysis from July 19, he highlighted a positive development in the Bitcoin/Gold (BTC/GLD) ratio.

Brandt pointed out that the ratio is on the verge of forming a channel that could become the right shoulder of an inverse head and shoulders pattern. This pattern, if it materializes, could project a BTC/GLD ratio of 150, suggesting Bitcoin could potentially outperform gold by a factor of five.

This is not @PeterSchiff day. And next 10 years will be cruel as well.
The $BTC / $GC_F ratio chart is forming a channel that might become the right shoulder of an inv. H&S pattern projecting ratio of 150 to 1, meaning BTC will outpace Gold by 5X @RaoulGMI what do you th ink? pic.twitter.com/Yg3NxFfb0x

— Peter Brandt (@PeterLBrandt) July 19, 2024

The chart from July 19 shows Bitcoin’s significant rise against gold over the past decade. Despite periods of consolidation and correction, the overall trend has been upward. The current consolidation phase might be a precursor to a major breakout. 

Currently, Bitcoin changes hands at $64,363, having dropped 0.91% this morning. The cryptocurrency has collapsed below the 20-day SMA ($65,531), confirming the bearish trend. Regardless, Brandt maintains his optimistic view on Bitcoin’s trajectory.