Bitcoin’s price action just flashed a pattern that veteran trader Peter Brandt compares to the infamous 1977 soybean crash — an “expanding top” that preceded a near 50% plunge. Brandt isn’t calling a crash, but he’s making traders look twice: he sees a path either to $250,000 on strength or a recoil toward $60,000 on weakness. Another analyst challenged the lookalike pattern, and Brandt’s response was refreshingly tactical: “I’d go long if it rises and short if it falls.” Translation for traders: stop predicting, start preparing.

What’s Happening

Brandt highlighted a potential expanding top structure — a series of higher highs and lower lows that widens over time — historically a sign of distribution and growing uncertainty. This matters because a major public company reportedly holds 640,000+ BTC, and a deep drawdown would stress any leveraged exposure. Meanwhile, cycle watchers argue the current Bitcoin cycle is in a late stage, increasing the likelihood of outsized volatility and sharp trend reversals.

Why It Matters to Traders

- Late-cycle dynamics often compress liquidity, amplify leverage risks, and reward reactive risk control over conviction calls. - If the pattern resolves lower, trapped longs can accelerate moves; if it resolves higher, forced short covering can be violent. - Brandt’s warning on sizing is critical: risking too much per trade is how portfolios get wiped. Precision beats bravado.

Action Plan: Trade the Reaction, Not the Prediction

• Define triggers: Consider longs only on confirmed higher-high breakouts with rising volume and strong spot-led bid; consider shorts only on decisive lower-low breaks with expanding range and weak spot support.
• Use invalidations: Place hard stops just beyond the breakout/breakdown structure; no “hope” stops.
• Size like a pro: Risk a small, fixed fraction per trade (e.g., 0.25%–1%) so a string of losses won’t cripple the account.
• Hedge volatility: If directional conviction is low, use options (debit spreads or collars) to cap downside while staying in the game.
• Stagger entries: Scale in on confirmation steps rather than all at once; reduce after parabolic extensions.

Cycle Heat Check: Signals to Monitor

• Spot vs. perp divergence: Healthy rallies are spot-led; perp-led spikes with rising funding invite reversals.
• Liquidity pockets: Watch resting liquidity around recent highs/lows — sweeps often precede the real move.
• On-chain profit taking: Rising realized profits/MVRV stretch can flag distribution in late cycle.
• ETF/net flows: Sustained positive spot ETF inflows support breakouts; persistent outflows weaken them.
• Weekly trend: The 20-week moving average is a classic cycle guardrail; breaks often reset trend assumptions.

Bottom Line

The setup rewards discipline over prediction. Prepare for both outcomes, let price confirm the path, and keep risk per trade small. In late-cycle regimes, survival is an edge — and agility is alpha.

If you don't want to miss any crypto news, follow my account on X.