Bitcoin’s 2018 $3.2k Bottom Analyst Thinks This Comes Next
Bitcoin is at a stalemate: the cryptocurrency has been stuck in a fairly tight holding pattern over the past six to seven weeks which has seen it rise from ~$8,500 to ~$10,000.
Any attempt to deviate from this range has led to a rejection, with bears and bulls struggling to create a directional pattern, while the S&P 500 still flirts with topping out.
A top analyst who predicted the bottom of Bitcoin in late 2018 recently gave insight into how the crypto market is likely to head next, using the S&P 500 as a guide.
Bitcoin will see Retracement 30 per cent before Bounce: Analyst
Six months before Bitcoin bottomed at $3,150, an analyst predicted that $3,200 would be the bottom point in the bear trend.
The same analyst is now predicting that in the coming month, Bitcoin will see a 30 percent retracement, noting how the S&P 500 shows signs that it will see a lower “ABC” correction as per the Elliot Wave analysis.
“I was bullish on BTC here but am beginning to think a 5 wave move up and larger ABC down may now be underway,” the analyst commented on the prospects of a move lower in the coming weeks.
After the correction, he expects a bounce towards $12,000
Stock Market Crash Could Change That
While the above-mentioned trader predicts a slight decline in equity value, a larger equity crash could cancel the above-mentioned medium-term bull case.
Scott Minerd, the global CIO of investment and financial services firm Guggenheim Partners, recently told CNBC’s “Closing Bell” that the S&P 500 could retrace by nearly 50 per cent in the months ahead.
His argument boiled down to three core factors: the index broke a technical uptrend formed after March’s capitulation, stocks are exceedingly overpriced as markets shake off the pandemic-induced revenue declines, and the “don’t fight the Fed” argument is faulty.
Bitcoin will move lower if the S&P 500 does.
As Arthur Hayes, CEO of BitMEX, once said:
“Bitcoin will be owned unlevered. Could the price retest $3,000? Absolutely. As the SPX rolls over and tests 2,000 expect all asset classes to puke again.”
The existence of a correlation was echoed by crypto trader Avi Felman, a trader at the BlockTower Capital. He recently said on the matter:
“If you’re sitting there thinking we’re headed for 11k but that we’re also about to experience a second wave I’d rethink that. If BTC can’t break 10k during a raging equity bull party not sure I see 11k BTC with Hertz below $1.”
— CNBC's Closing Bell (@CNBCClosingBell) June 11, 2020