Cryptocurrency News

Veteran trader Peter Brandt sees bitcoin crash further after 50% drop in May

bitcoin (B T c) still faces the prospect of falling further Price made a strong recovery after crashing from $ 65,000 to $ 30,000 in May 2021.

So it reflects in the latest statements by Peter Brandt, chief executive of global trading firm Factor LLC, who questioned, if not claimed, the longevity of the ongoing relief rally in the bitcoin market, especially after the more than 50% price crash. .

The seasoned commodity trader challenged “BTC price historians” to identify a single instance over the past decade in which bitcoin recorded a new record high seven months after crashing by more than 50%. He also went on to mention a case when a 50% drop in the bitcoin price did not lead to a correction of at least 70%.

Twitterati. one of reacted With two examples: the March 2020 rebound, in which the price of bitcoin reached its all-time high above $ 20,000 – if not seven – from its long-term cyclical high of $ 3,850 in March to $ 13,880 in June after the crash in March. In 2019; And the bull run of 2013, in which the cryptocurrency gained more than 2,450%, fell below $45 in an 80% overnight crash eight months later.

Bitcoin price action from the April-November 2013 trading session. Source: TradingView

“Not for both,” Brand said, apprehensively because it took an additional month for bitcoin prices to reclaim their record highs in both cases. Nevertheless, Veteran’s questions remained fairly cryptic due to its selective time frame and what they were trying to prove about crypto market bias in the first place.

On-Chain Analyst Willy Woo Predicted What Brandt Was Trying to Forecast Further fall in the price of bitcoin markets, based on the cryptocurrency’s historical reactions to the more than 50% price correction event.

Wu attempted to pour cold water on Brandt’s fractal-oriented bearish market outlook, citing “fundamentals.”

Wu responded, “All the drops on that scale with a long recovery were from a starting point where the price was higher than the fundamental valuation.”

“This setup differs in that price is below fundamentals. As a guide, the COVID dump fell below fundamentals and therefore recovered quickly.”

Wu himself did not explain what he meant by the term “fundamentals”. His active followers on Twitter took charge to clarify that the analyst noted the “network effect”, as investments in gold and cash-oriented portfolios found a place in anti-inflationary holdings.

Bitcoin surges from March 2020 low to new all-time high of $65,000, as investors see its downside as a Defense Against High Inflation.

In retrospect, interest rate suppression, a $120 billion bond purchase program, and the U.S. government’s Incentives package worth trillions of dollars – aimed at curbing the impact of the COVID-19 epidemic on the US economy – led investors to risk assets such as bitcoin and stocks.

Bitcoin and the S&P 500 surged together in March 2020 after the crash caused by the pandemic. Source: TradingView

On May 12, the US Bureau of Labor Statistics Manifested The country’s consumer price index (CPI) rose by 4.2% year-on-year, recording its sharpest climb since 2008. This increases bitcoin’s appeal among individuals and organizations looking to hedge against inflation in the long run, particularly as higher consumer prices penalize savers forcing the US dollar valuation down.

“This is the number one reason I’m bullish on something like bitcoin,” said Anthony Pompliano, investor at Pomp Investments. in January 2021.

“It is the single biggest savior of money in the world. There is extreme volatility in the short term, but in the long term, bitcoin shines. It does a great job of preserving purchasing power and avoiding the dangers of fiat currency devaluation.”

Meanwhile, some analysts believe that Bitcoin will continue to decline, in line with Brandt’s indications. One of them includes Richard Durant, an analyst at Morgan Stanley, who described bitcoin as “Sentimental property“It is not clear at this stage what they might be,” he said.

Analyst of BiotechValley Insights wrote The growth of bitcoin does not make the flagship cryptocurrency a hedge against inflationary fears. He referred to the May 19 price crash that appeared a week after the US Bureau of Labor reported a CPI reading of 4.2%.

“Bitcoin is related to high-risk Momentum growth stocks such as TSLA, which is higher than safer-assets such as gold or bonds,” he said.

Meanwhile, Brandt, who correctly predicted the 2018 Bitcoin price drop, appears more technically focused on the next market outlook. In March 2021, he predicted the BTC/USD exchange rate to reach $200,000 in the third or fourth quarter of this year.

Meanwhile, Brandt was also a decide As bitcoin prices were moving upwards of $ 12,000 in September 2020, they should hold their money in equity instead of cryptocurrency. The cryptocurrency closed the year at around $29,000.

In March 2020, Brandt Brand expected BTC will drop to $1,000. But the cryptocurrency reversed its bearish course on testing an upper level of $ 3,800 as support.