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The beginning of the new year 2025 can hardly be called prosperous for the cryptocurrency market. First, the price of Bitcoin (BTC) teased us with a new all-time high breakout, which eventually ended with a lower high compared to the December peak, forming what many see as a head and shoulders pattern.

One of the most popular technical analysis formations, the head and shoulders pattern, presents itself as three waves of growth, with the head being the middle and largest wave.

However, it is the shoulders that fail to reach the middle peak, signaling the current weakness of buyers. The pattern is ominous in that, after the second shoulder is formed, the price of the asset is in danger of breaking below the neckline and drawing down by as much as the head was worth.

Three scenarios for Bitcoin (BTC) by Peter Brandt

According to the latest Bitcoin outlook by Peter Brandt, a popular trader with 50 years of experience, the leading cryptocurrency is currently drawing a classic head-and-shoulders pattern. If validated, the price of BTC might see three outcomes from the current position. The first, according to the trader, is to complete the formation and trend to target around $76,000, which is over 18% below the current price.

The second scenario, according to Brandt the most optimistic one, is that the price of Bitcoin forms a "bear trap," which is a figure of market manipulation, when the price dips, but only to prompt everyone to turn bearish and after that short squeeze upward. Brandt previously highlighted this option as the most likely. 

The third scenario is that the head and shoulders will turn into a larger pattern, which does not necessarily mean that it will be more bullish or more bearish.

As for Brandt himself, patterns are not set in stone. As the trader notes, sometimes they work, but they often change or fail.

It remains to be seen where the market will take the price of Bitcoin, but the fact that even experienced traders like Brandt are struggling to offer a concrete outlook on the current state of the market speaks for itself.