A widely followed crypto analyst known for calling Bitcoin’s big correction in May of 2021 says there’s an argument to be made for another significant collapse.

The analyst known as Dave the Wave gives his 86,000 followers a collection of warning signs that Bitcoin may be en route to a drop as far as $25,000.

According to Dave the Wave, a drop down to $25,000 would match up with five different technical metrics.

“The arguments for 25K:

– Meeting the Gaussian Channel

– Meeting the 4 year MA (moving average)

– Meeting the lower channel of the LGC (logarithmic growth curves)

– Measured target for a head and shoulders [on shorter-term charts]

– Measured 50% real retracement of the recent parabolic spike.”

Gaussian channels are a momentum indicator that can be used to identify price tops and bottoms. According to the analyst, a drop down to $25,000 would also be a potential target if a head and shoulders pattern played out, which is a price structure used to identify a trend reversal.

The analyst takes a look at the various times that Bitcoin was at the very bottom of the logarithmic growth curves (LGC). He estimates that if BTC were to enter a long bear market, it may not find a bottom until 2023 at the price of $28,000.

“Value at the *base* of the LGC over the last 6 years or so:

2016 – 0.4K

2019 – 4K

2022 – 21K

2023 – 28K.”

Lastly, the analyst entertains another scenario whereby Bitcoin drops down to around $28,000 before launching up above the six-figure mark as soon as May of 2022.

“Possible fractal with a breakout to new ATHs as soon as May next year.

I’d say some would be stumped as to whether this is bullish or bearish.”

At time of writing, Bitcoin is trading at $47,802.

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Macro guru and Real Vision CEO Raoul Pal is shedding light on some of the catalysts he believes could spark a new bull run in the crypto market.

In a lengthy thread, Pal tells his 846.000 Twitter followers that he believes the recent stagnancy of the crypto markets could be the result of retail investors lacking disposable income due to a rise in the cost of living.

“My view is that the key reason the market has seen less retail activity is that wages are rising slower than CPI [consumer price index]. The cost of living has gone up dramatically and that has removed the marginal investor from crypto. They just can’t afford the disposable income.”

Since retail investors have been pushed out, the former Goldman Sachs executive says that institutions other large players will have to be the ones to finally move the crypto markets. He predicts this happens sometime in Q1 of 2022.

“I don’t see stable economic growth and lower inflation for a while, so we are going to have to rely on institutions and hedge funds to allocate meaningful capital. I think that is coming and Q1 should confirm that indeed maybe January, but we have to wait and see.”

According to Pal, institutional and retail investors could ultimately start feeding off each other’s movements, starting a loop of FOMO (fear of missing out).

“New capital will flow in over time and a broader rally, when it arrives, will bring retail investors and a reflexive loop of institutional investors FOMO’ing in. That day will come.”

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/Tithi Luadthong/Natalia Siiatovskaia

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