The “magic line” investors highlighted on many charts has been making the rounds of the crypto-currency and trading communities for the past few weeks as the break of this line would suggest the reversal of the entire market, obviously including crypto-currencies as their correlation with most stocks has been at an extremely high level since 2021.
Sorry trendline fanatics
It will mean absolutely nothing to me as a trade if this trendline is violated $SPY pic.twitter.com/V5LFYKdGHx
However, Peter Brandt does not seem to share the same enthusiasm as other traders and believes that the breakout of this line will not lead to anything, unlike other traders who are eager to see the solid breakout and the acceleration of the rally.
Unfortunately, the prominent analyst provides no additional information on why he thinks the trendline that almost all traders and investors are putting forward in their analysis is irrelevant or does not provide any momentum to the market.
Some users assume that crossing this line does not necessarily launch a long-term bullish rally, as the technical level does not look as impressive on longer, monthly or even weekly time scales.
The recent break of the line did not indeed bring volatility back to the market, even after the index gained a foothold above that line. Bitcoin and altcoins have displayed the same dynamics, while some assets have even pulled back from their local highs, losing some of the value they had previously gained.