Benzinga - Seasoned investor Peter Brandt on Thursday asked macro guru Raoul Pal if Bitcoin (CRYPTO: BTC) is finally heading for an imminent rally.
What Happened: Brandt posed the question on X, “Might the bull be awoken? Thoughts?” to Pal, seeking his insights on the matter.
Brandt went on to illustrate his viewpoint, pointing out several indicators that could suggest a potential rally. He said that Bitcoin currently exhibits the “lowest Average Directional Index (ADX) reading since July 2020,” which implies a significant decrease in trend strength and volatility.
A low Average Directional Index (ADX) reading generally indicates a decrease in trend strength and volatility. This does not directly imply if it is bullish or bearish, but it suggests a potential period of consolidation or uncertainty in the market. It is often used as an indicator of a potential trend reversal or a period of sideways movement before a new trend emerges.
Additionally, he mentioned the possibility of a second retest of the underlying Head and Shoulders (H&S) bottom formation, a pattern often observed during trend reversals. Brandt also noted the emergence of a small inverted Head and Shoulders pattern over a span of six weeks.
An inverted Head and Shoulders pattern is a technical analysis chart pattern that suggests a potential trend reversal from bearish to bullish. The pattern includes three troughs, with the middle trough being lower than the other two, indicating a change in market sentiment from sellers to buyers.
Responding to Brandt’s observations, Pal concurred, expressing agreement with the proposition that Bitcoin’s recent indicators indeed look promising. "Agreed. Looks promising."
Agreed. Looks promising— Raoul Pal (@RaoulGMI) September 28, 2023
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Why It Matters: The rally in the prices of Bitcoin, Ethereum (CRYPTO: ETH) and other altcoins come as Valkyrie Investments, based in Nashville, has made history as the first out of nine ETF issuers to receive approval from the Securities and Exchange Commission (SEC) for an exchange-traded fund (ETF) that allows investors to speculate on the future price of Ethereum.
Earlier in August, Brandt said that Bitcoin is currently facing a significant test as it challenges the multi-contact point trendline that originated from the 2023 bottom. He further explained that any movement below the August low could be interpreted as a bearish signal or potentially a bear trap.
Price Action: At the time of writing, ETH was trading at $1,607.29, up 3.13% in the last 24 hours, according to Benzinga Pro.
Photo by AlyoshinE on Shutterstock
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