The bitcoin price is at risk of a swift and painful reversal after its parabolic move to $13,868. That’s according to veteran trader Peter Brandt. Brandt says the worst-case scenario is an 80 percent retracement from the 2019 high, implying a fall below $3,000. This bearish scenario would come into play if bitcoin breaks the current parabolic pattern. (if you want to make money in the financial market use our forex robots)
“If current parabolic phase is violated, we could expect either an 80% correction of 7-month advance or much smaller correction w/ definition of new parabola w/ shallower slope.” Most analysts agree that bitcoin has entered a healthy breathing period and may temporarily dip lower, but Brandt’s assessment is particularly brutal.
But is an 80% crash realistic? Brandt explains that bitcoin’s recent 30% retracement is “mild” when looking at historical pullbacks. Indeed, the bitcoin price experienced nine major corrections in the last bull market.
Undoubtedly, bitcoin is in a cooling-off period which is healthy after the explosive rally. Trader Josh Rager suggested that bitcoin will likely range for a while, but he sees some downside in the short-term. Mati Greenspan, senior analyst at eToro, points to the formation of a flag pattern on the four-hour bitcoin price chart. This pattern typically indicates a period of price consolidation before an explosive breakout higher or lower. This break will dictate whether bitcoin goes on to test 2019’s high or collapses back below $10,000.
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Bitcoin Price Could Crash Below $3,000 in Brutal Worst-Case Scenario, Warns Trader, CCN, Jul 08