Peter Brandt, one of the most vocal critics of Bitcoin (BTC), has taken a jab at the digital currency again, dwelling on the coin’s energy correlation with its value this time.
Talking throughTwitter, Brandt said Bitcoin does not provide any economic function, ironically highlighting that the most significant view of Bitcoin is when it is seen as enormous energy consumption.
The comment about Bitcoin in itself is a response to a July 19 tweet from Michael Saylor, the co-founder and CEO of MicroStrategy Incorporated, a firm that has accumulated over 140,000 Bitcoin units. In his characteristic manner, Saylor had rained his accolades on Bitcoin as “a digital commodity because it has no issuer and is secured by energy.”
In the criticizing comment, Peter Brandt noted that Bitcoin is “Secured by energy only in the sense that it is useless without an exorbitant use of energy — and then without providing economic function. It is a huge myth that somehow $BTC is anything but energy consumption.”
In what later turned out to be an education session on Twitter, Saylor took time to school Brandt on Bitcoin’s inherent ‘economic function’.
According to Saylor, “All commodities require energy. Since #bitcoin is a commodity, it can serve as global digital money. The economic function is to provide property rights to 8 billion people as well as a global settlement network that has already cleared $17 trillion dollars so far this year.”
He buttressed his points by Posting the chart below:
It is not uncommon to find critics using the energy utilization of Bitcoin and other Proof-of-Work digital assets to argue for an investor boycott or a ban. EU regulators surmounted such pressure and refused to ban PoW in the newly passed Markets in Crypto Assets (MiCA) bill.
Bitcoin has been dropping consistently for the past week and the crypto market has lost over $500 billion following this dip. Like with any crash, there have been the expected calls of ‘buy the dip’ from investors who believe that the dips are only temporary and that the digital asset will soon recover all of its lost value.
While this advice is sometimes sound, there is no doubt that there are some drawbacks with it, which could range from adding to a losing position that ends up losing more, to sinking more money in projects that may already be doomed to fail. Veteran trader Peter Brandt has addressed these calls of ‘buy the dip’, explaining why investors should not follow it.
Related Reading | Melania Trump Congratulates Bitcoin On 13th Anniversary Of Bitcoin Genesis Block
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You Could Lose More Money
Famed trader Peter Brandt responded to a tweet from CEO of Vailshire Capital, Jeff Ross, saying that the price dips that are being experienced by bitcoin presented an opportunity for long-term traders to increase their holdings. Brandt’s tweet was vehemently against this school of thought, proposing instead “a sacred trading rule” for investors during times like these.
The veteran trader compared the current movement of bitcoin to the Silver $SI_F of 1980, which had grown to its $50 top after a massive run. It had subsequently sunk to $3.65, leading people to purchase it in the hopes of catching the dip, but the asset ended staying low for more than two decades.
I remember in 1980 people saying the same thing about Silver $SI_F after it topped at $50
It then sank to a low of $3.65 and did not start back up for 24 years
Not saying $BTC is the same, but a sacred trading rule I have used is never add to a losing trade
Basically, the investor urged investors to not rush to purchase bitcoin because it is low and they think it will not go lower.
BTC continues downward trend | Source: BTCUSD on TradingView.com
Comparing Gold And Bitcoin
In a subsequent tweet, Brandt did a similar comparison to the price of bitcoin. This time around, he focused his attention on gold, calling out the fact that just like silver in the 1980s, gold experienced a similar trend.
He explained that gold had first hit its all-time high of $873 in 1980, followed by a drop in price to $255. The asset which had been the inflation hedge of choice for many decades had remained in this territory for almost three decades following this and would only beat this previous all-time high 27 years later.
Related Reading | TA: Bitcoin Key Indicators Suggest A Strengthening Case For More Downsides
Brandt admonished the author of the previous tweet by asking, “Is this your definition of a ‘long-term’ investor?”
Naturally, Brandt’s comment regarding bitcoin had drawn the ire of bitcoin maximalists who flocked to explain to the older trader why the digital asset would not follow the footsteps of gold and silver.
One user tweeted that “Difference is btc is technology, not a rock”, while another pointed out that bitcoin had more utility, saying, “Gold has been a disastrous investment. Not much utility in it. Hard to carry your gold with you in the event of political system or economic collapse. Hence #Bitcoin.”
Featured image from Blogtienao, chart from TradingView.com
Those expecting another Bitcoin (BTC) speculative price dip are looking in the wrong place, one of the industry’s best-known analysts suggests.
In a Twitter discussion on Dec. 20, Willy Woo, creator of on-chain data resource Woobull, said that popular retail exchanges will not spark a further BTC price rout.
U.S. retail stays calm throughout the rout
Woo was debating the odds of fresh downside with veteran trader Peter Brandt, a commentator revered for calling Bitcoin price bottoms in recent years.
Brandt argued that volume spikes which accompany price crashes have been absent in December versus previous episodes. As such, the “real” capitulation phase is yet to occur.
Responding, Woo argued that speculative derivatives traders had featured in the cascade to $41,800 earlier this month, while retail investors continued to hold BTC. As such, volume data from Coinbase or other retail platforms does not serve as a suitable indicator for an imminent dip.
“That’s a Coinbase chart, sell pressure has been from deleveraging on futures markets, also more on Asian spot exchanges,” he wrote.
“Overall no signs yet of an on-chain sell off (HODLers holdling, speculative investors took profits). Effectively a consolidation under weak December liquidity.”
Implications of volume
Key bottoms in $BTC have occurred with high volume panic capitulation
That has (yet???) to happen
Thoughts??? pic.twitter.com/dYmDNADxuP
— Peter Brandt (@PeterLBrandt) December 20, 2021
Brandt appeared to acknowledge the nuance.
Open interest creeps higher
As Cointelegraph reported, meanwhile, retail traders have been buying throughout the past several weeks, as evidenced by wallets with 1 BTC or less adding to their balances.
Related: Bitcoin wobbles below $46K as 1 BTC passes 800K Turkish lira for the first time
With whales biding their time, derivatives appear to be regaining confidence, with Bitcoin futures open interest steadily rising since the dip.
Bitcoin futures open interest chart. Source: Coinglass
The Grayscale Bitcoin Trust, meanwhile, is trading at its biggest-ever discount to net asset value in history this week.
Bitcoin (BTC) may have printed a classic “head and shoulders” pattern but bulls could still win, says veteran trader Peter Brandt.
In a tweet on Oct. 27, Brandt, famous for his accuracy when it comes to BTC price predictions, refused to flip bearish on Bitcoin.
Brandt: Bitcoin may face “larger congestion”
Despite nearing $58,000 in a fresh wipeout of leveraged traders Wednesday, analysts broadly remain calm, even calling for highs to return in a show of strength which should catch many by surprise.
For Brandt, there is also little reason to dismiss Bitcoin on the back of current price action.
“Head and shoulders tops need not always produce a bear market to the implied target or beyond,” he wrote.
“This pattern can also fail (bullish) or morph into a larger congestion (exhausting).”
An accompanying chart showed last week’s all-time high of $67,100 surrounded by two lesser peaks, resulting in the so-called “head and shoulders” formation.
BTC/USD chart showing “head and shoulders” pattern. Source: Peter Brandt/ Twitter
Traditionally, such events preclude extended downside for an asset, with upside exhausted and unsustainable after a certain point is reached.
The idea that Bitcoin could slide into an extended sideways period has meanwhile reentered the narrative in recent days. Cointelegraph contributor Michaël van de Poppe earlier forecast a slow grind toward $90,000, this potentially only hitting early next year.
All going to plan
For those worried about further losses on BTC/USD, decreasing funding rates — now all but “reset” after the flushing out of leverage — could allay fears.
Related:Bitcoin price dip matches October 2017 with BTC ‘explosion’ still forecast before 2022
Binance had been a particular source of concern over the week with large upside bets creating an unwieldy setup, which ultimately fell apart on the dip.
Bybit funding at 55% APR & Binance at 68% APR
Meanwhile Deribit at 15% and FTX at 7%…
Looks like we have to flush out the apes again…
— Will Clemente (@WClementeIII) October 26, 2021
The current spot price, at around $59,000, further lines Bitcoin up to potentially hit the “worst-case scenario” monthly close of $63,000. Its source, analyst PlanB, correctly predicted both the August and September monthly close — $47,000 and $43,000, respectively.
November, by contrast, should end on a much higher $98,000.
With over half a million followers on Twitter, Peter Brandt is a well known career trader who often tweets valuable insights about the markets. In a recent tweet, Peter took a stance on Tether calling it a useless mind fart.
Choice Words From Iconic Trader Peter Brandt
According to Peter, the concept of converting a traditional fiat currency such as the dollar or the euro into a digital fiat unit such as Tether, just in order to protect its store of wealth against inflation, is a meaningless process as it serves no purpose.
Circular reasoning – TETHER
The idea that we convert one fiat currency unit (USD, EUR, et al) into another fiat currency unit (tether) so as to protect the store of wealth of the first fiat currency unit is nothing but a gigantic mind fart.
— Peter Brandt (@PeterLBrandt) August 16, 2021
Though there are many who agree with Peter’s tweet, a few have valid arguments against it. One user argues that stable crypto assets exist to allow people to take their local currency digital in a somewhat trustless way. The trust is at the issuer level instead of having to worry about that risk at every digital platform one might use.
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Related Reading | Peter Brandt: 99% of Altcoins Will Be Forgotten in Five Years
Another Twitter user argues that no one really converts traditional fiat into stablecoin to protect their store of wealth, that Tether and other stables are just a nonvolatile bridge asset between trades of more volatile ones, without having to leave the crypto realm.
Meanwhile, Tether continues to dominate the crypto market as its leading stablecoin. Just yesterday the market cap of Tether has grown to $64B marking a new milestone and another indication of the market’s continued trust and confidence in Tether.
Get 110 USDT Futures Bonus for FREE!
With ever-increasing adoption of crypto, the demand for stablecoins such as Tether has been on the rise and is expected to grow further. At the time of writing, the marketcap of Tether sits at $62.6B. Source: Marketcap USDT Tradingview.com
On August 9, Tether Holdings Limited, the issuer of the largest stablecoin USDT has released a new attestation report that covers useful insight on the composition of its reserves in a bid of be more transparent.
Ever since March when the company released its first attestation report vaguely revealing assets and liabilities, investors have been patiently waiting for a second report. In the latest attestation report, Tether has not only included the composition of its reserves, but also given a breakdown of the ratings and maturity of its commercial paper holdings along with the certificates of deposit.
Related Reading | Brandt: You’re Doing it Wrong if You Accumulate Dollars Over Bitcoin
As on June 30, 2021, the company holds $30.8B in CP and CDs which is about 49% of its reserves. Around 93% of this is rated A-2 and above and 1.5% iis rated below A-3. Among other reserves, the company holds around $6.28B in cash and bank deposits, $1B in reverse repo notes and $15.28B in U.S Treasury bills.
Featured image from iStockPhoto, Charts from TradingView.com
Cardano (ADA) has been in the spotlight lately and this is partially because of its early 2021 price performance and the fact that its huge fan base has been anxiously awaiting the launch of the network’s smart contract capability in the upcoming Alonzo upgrade.
While the rise of DeFi took place and the total value locked in decentralized finance applications soared above $76 billion, Cardano investors have been waiting nearly four years to the project to deliver on all its promises.
Traders are now trying to determine whether the 50% rally since July 21 was backed by positive expectations or fundamentals. The movement could have been a “return to the mean,” signaling that previous bearish trades were closed after two month negative performance.
ADA/USDT. Source:TradingView
Cardano has been performing negatively partially because of the failed estimates from Cardano founder, Charles Hoskinson, who estimated that the network would have “hundreds of assets,” along with “thousands of DApps” by July.
Hoskinson did defend himself on YouTube by saying that more than $10 million in nonfungible tokens (NFTs) have been sold through the network but this pales in comparison to his previous estimates.
On July 14, IOHK, the blockchain development team behind Cardano, migrated the Alonzo testnet to an intermediary stage that allows developers, validators, and stake pool operators. And on July 16, the Cardano-based Spores Network, an NFT and DeFi marketplace project, raised $2.3 million.
Despite these bullish developments, veteran technical analyst Peter Brandt said that Cardano’s price chart formed a classical “Head and Shoulders” pattern that could lead to a 60% or higher crash.
Futures open interest is growing, but what about investor optimism?
Let’s take a look at ADA’s derivatives data to cross-check how professional traders are dealing with this duality.
ADA futures aggregate open interest. Source: Bybt
After peaking at $1.13 billion on May 16, the aggregate open interest on ADA futures contracts plunged to a $285 million low on July 19. Still, traders’ interest in the altcoin appears to be rapidly increasing because the indicator currently stands at $530 million.
Longs (buyers) and shorts (sellers) are matched at all times, even though their leverage may vary, so viewing the funding rate is a better way of determining how bullish or bearish those investors are.
Derivatives exchanges will typically charge the side demanding excessive leverage every 8-hour, and this fee is paid to the opposing side. Neutral markets tend to display a 0% to 0.03% positive funding rate, which is equivalent to 0.6% per week and indicates longs are the ones paying it.
Ever since the May 19 crash, Cardano’s funding rate has been ranging from zero to slightly negative, indicating that shorts are the ones demanding more leverage. Nevertheless, on Aug. 7, there were early signs of a trend inversion, but it is not yet confirmed.
Professional traders are slightly bearish
It is also useful to confirm that the quarterly futures contracts premium reflects a trend similar to the one seen in perpetual contracts because these fixed-date instruments do not have a funding rate adjustment. Therefore eventual demand imbalances are reflected by a price difference to the regular spot markets.
A negative premium is a bearish situation, known as backwardation, and healthy markets should display a 0.2% to 1% premium.
Retail traders usually avoid these instruments to avoid the hassle of calculating the futures premium or having to manually roll over positions nearing expiry.
OKEx Sept. ADA/USDT futures premium to the regular spot market. Source:TradingView
As shown above, the discount on futures contracts that have been ongoing since May 20 started to vanish. Although far from a neutral-to-bullish scenario, it reveals a demand increase from longs.
Consequently, derivatives indicators show that investors are not yet bought on Cardano’s promises to deliver decentralized applications and tokens. This might be a reaction to the over-extended rally of early-2021 or simply a lack of trust with the continued delays in development.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Cardano is close to attaining the title of a fully-fledged smart contracts platform following a critical upgrade in mid-July. The project’s founder Charles Hoskinson confirmed that they recently processed the sales of more than $10 million worth of non-fungible tokens atop their public ledger.
Moreover, an NFT and DeFi Marketplace called the Spores Network, which raised $2.3 million in a fundraiser, said it would deploy its services atop the Cardano chain for lower transaction costs, lower carbon footprints, and higher transaction throughput.
But the Ethereum rival’s growth as a project might not lead to higher adoption for its native cryptocurrency, ADA, at least according to an analysis shared by Peter Brandt, the chief executive of global trading firm Factor LLC.
A 60%-90% crash ahead?
The veteran analyst shared a bearish setup for ADA in a tweet published Friday. He cited a classic technical pattern, known as Head and Shoulders, to predict a downside scenario for the Cardano token that is already up more than 600% on a year-to-date timeframe.
In detail, Head and Shoulders forms when the price forms three consecutive peaks atop a single support level, with a condition that the middle peak is higher than other two, which are typically of the same height. The price eventually breaks below the support levels—also called neckline—and falls by as much as the maximum height between the middle peak’s top and the support level.
ADA visibly fits the description, as shown in the chart shared by Brandt.
Cardano’s head and shoulder setup. Source: TradingView.com, Peter Brandt
The analyst envisioned the ADA/USD exchange rate to drop as far as $0.12, down 90% from the pair’s current bid near $1.26. A percentage-based calculation of the Head and Shoulders pattern marked its profit target near $0.35, down 60% from its neckline.
Brandt recalled his record of predicting market tops to add strength to his depressive Cardano prediction. For instance, one of his analyses from 2018, involving Litecoin, corrected spotted a descending triangle setup following the altcoin’s run-up from $4 to $420 during the 2017’s bull run.
“I remember being scoffed at unmercifully when I identified this top in LTC/USD back in mid 2018,” Brandt tweeted. “Hey Cardano trolls, take aim.”
But can 2018 repeat?
The crash that followed the 2017 bull run originated primarily because of the so-called initial coin offering bust. A study conducted by Statis Group noted that more than 80% of blockchain startups that raised funds in Bitcoin, Ether, and other top coins of that time, failed to turn up a working product.
Meanwhile, a majority of them turned out to be outright scams that sold the raised crypto capital, thus creating a downward pressure on the entire market. Litecoin, Bitcoin, and Ether crashed by more than 80% in 2018 as the ICO FUD pushed investments out.
In contrast, the 2020 bull run came in the wake of macroeconomic blunders. The Federal Reserve’s efforts to contain the economic aftermath of the Covid-19 crisis saw it launching an unprecedented quantitative easing program. As a result, near-zero interest rates and $120 billion worth of asset purchases sent investors looking for better alternatives in riskier markets every month.
As a result, Bitcoin boomed from below $4,000 in March 2020 to above $65,000 in April 2021. Meanwhile, altcoins, which tend to tail Bitcoin trends, surged likewise. Cardano’s ADA was one among them; it is now trading more than 7,000% higher from its mid-March bottom.
The 30-day correlation between Bitcoin and ADA stands near 0.85 above zero, per data provided by Crypto Watch.
Related: Waiting for Alonzo: Cardano smart contracts creep toward full launch
Simon Kim, CEO of crypto venture fund Hashed, told Cointelegraph in March that the 2020-2021 crypto market is entirely different from the one from 2017-2018, noting that the market now is running on a completely different fundamental. He said:
“Firstly, various DeFi projects are creating value based on a clear business model. Secondly, we’re seeing record active investment by institutional investors, and finally, various on-ramps and off-ramps, including not only PayPal and Visa but also large banks, are now emerging.”
Rekt Capital, a pseudonymous market analyst, noted that ADA needs to close above its weekly close of $1.30 to confirm its long-term bull trend. Cointelegraph’s Rakesh Upadhyay also pointed out that a break above $1.33 would increase the Cardano token’s potential to extend its upside target towards $1.90.
“Conversely, if the price turns down from the current level or the overhead resistance and slides below $1.20, it will indicate that bears continue to sell at every higher level. That may result in a retest of the critical support at $1,” Upadhyay warned, nonetheless.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Ripple blockchain’s native token XRP could make a full bearish price swing against Bitcoin (BTC), as per a classic technical indicator.
Dubbed as Head and Shoulders (H&S), the pattern develops when an asset forms three peaks atop a common baseline. The outside peaks, known as Shoulders, are close in height, while the middle one, called the Head, is the highest.
The H&S pattern is completed when the asset breaks below its baselines support, with high volumes, confirming a negative breakout. The so-called neckline also serves as the most common entry point for bearish traders as they target deeper downside levels. Though not every time, an H&S pattern’s profit target comes to be equal to the distance between the pattern’s high point and its neckline.
All-time low ahead
Peter Brandt, the CEO of Factor LLC, a global trading firm he established in 1980, sees the XRP/BTC instrument painting an H&S pattern. In a tweet published early Friday, Brandt raised speculation that the bearish indicator might prompt the Ripple token to turn into “a tidal wave” against Bitcoin. The veteran trader added:
“Completion of the [H&S pattern] would set [XRP/BTC] target at all-time-lows.”
XRP has broken below the H&S neckline with strong volumes. Source: TradingView.com, Peter Brandt
The total distance between the H&S pattern’s top and its baselines comes out to be around 1,794 satoshis. Meanwhile, the neckline support coincides with 2,120 satoshis. Therefore, the profit target in XRP/BTC’s case is (2,120-1,794), i.e., 326 satoshis.
Support levels ahead
But as XRP/BTC approaches its record low levels, the pair would still need to pass through a series of strong support levels.
XRP tests 200-day simple moving average as its first line of support. Source: TradingView.com
The XRP/BTC exchange rate bounced off its 200-day simple moving average (200-day SMA; the saffron wave) support at 1,696 satoshis. Should the pair sustain above the wave, the likelihood of retesting the H&S neckline around 2,120 satoshis is high. Meanwhile, a close above 2,120 satoshis would invalidate the H&S structure.
On the other hand, breaking below 200-day SMA exposes XRP/BTC to the next line of support near 1,555 satoshis. The level was instrumental in pushing the pair up by more than 170% in November 2020. Nonetheless, its Volume Profile shows a weaker trading activity in recent history, raising possibilities that it won’t be able to handle strong selling volumes as the H&S breakout accelerates.
The last line of defense, as per the Volume Profile indicator, sits at 847 satoshis, more than twice above the H&S profit target of 326 satoshis.
XRP/USD
Against the US dollar, XRP continued trending lower in its months-old descending channel pattern, while promising short-term upside opportunities.
XRP bounced off its lower descending channel support on June 22. Source: TradingView.com
The XRP/USD rebounded by up to 44.53% after testing the Channel’s support trendline on June 22. The pair’s move uphill had it test $0.69 as its interim resistance as bulls targeted an extended push towards $0.78.
Reclaiming $0.63 is cool but $0.79 will be the real test.
Let’s see if $BTC allows price to even get close to $0.79 in the short term… pic.twitter.com/PhHR7OJCQQ
— Posty (@PostyXBT) June 25, 2021
The $0.69-level has served as the resistance between November 2020 and April 2021. Meanwhile, the $0.78-level capped XRP/USD from extending its downside bias throughout May 2021.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Bitcoin (BTC) faces the prospects of falling further even after its price made a strong recovery after crashing from $65,000 to $30,000 in May 2021.
So it reflects in the latest statements from Peter Brandt, chief executive of global trading firm Factor LLC, who questioned, if not asserted, the longevity of the ongoing relief rally in the Bitcoin market, especially after a 50%-plus price crash.
The veteran commodity trader challenged “BTC price historians” to identify a single instance in the last decade that saw Bitcoin logging a new record high seven months after crashing more than 50%. He also asked to refer to one case when a 50% decline in the Bitcoin prices did not lead up to at least a 70% correction.
Challenge to $BTC price historians
In past 10 years (since May 2011) please identify a single (even one) instance:
1. When a 50%-plus correction did not lead to at least a 70% correction
2. When a 50%+ correction made a new ATH within 7 months
— Peter Brandt (@PeterLBrandt) June 1, 2021
One of the Twitterati responded with two instances: the March 2020 rebound, wherein the Bitcoin price recovered to its all-time high above $20,000 eight — if not seven — months after crashing to $3,850 in March from its long-term cyclical high of $13,880 in June 2019; and the 2013 bull run that saw the cryptocurrency rising by more than 2,450% eight months after bottoming out near $45 in an 80% overnight crash.
Bitcoin price action from April-November 2013 trading session. Source: TradingView
Brand said, “nope to both,” apprehensively because the Bitcoin prices took an additional month to reclaim their record highs in both cases. Nevertheless, the veteran’s questions remained cryptic enough due to its selective timeframe and as to what they were attempting to prove about the crypto market bias in the first place.
huh? why? your 2020 reasoning…maybe….but 2013 was legit a 50%+ drop and rage to ATH in November that year. How can you invalidate that price move?
— Crow Bar (@CrowBar50360383) June 1, 2021
On-chain analyst Willy Woo guessed that Brandt was trying to forecast a further price crash in the Bitcoin markets, based on the cryptocurrency’s historical responses to a 50%-plus price correction event.
Woo attempted to pour cold water on Brandt’s fractal-oriented bearish market outlook by referring to “fundamentals.”
“All drops of that scale with long recoveries was from a starting point where the price was overextended above fundamental valuation,” responded Woo.
“This setup is different in that price is BELOW fundamentals. As a guide, the COVID dump dropped below fundamentals and therefore recovered quickly.”
Woo himself did not explain what he meant by the term “fundamentals.” His active followers on Twitter took up the charge to clarify that the analyst referred to the “network effect” caused as investments sitting in gold and cash-oriented portfolios find a place in anti-inflationary holdings.
Bitcoin rose from its March 2020 bottom to a new record high near $65,000 majorly because investors saw its scarcity as a defense against higher inflation.
In retrospect, interest rate suppressions, a $120 billion bond purchasing program, and the U.S. government’s trillions of dollars worth of stimulus packages — aimed at curbing the aftermath of the COVID-19 pandemic on the U.S. economy — led investors to risk-on assets such as Bitcoin and stocks.
Bitcoin and S&P 500 surged in tandem following the pandemic-led March 2020 crash. Source: TradingView
On May 12, the U.S. Bureau of Labor Statistics revealed that the country’s Consumer Price Index (CPI) had risen to 4.2% year-over-year, logging its fastest climb since 2008. That tends to increase Bitcoin’s appeal among individuals and organizations looking for hedging against inflation in the long run, especially as higher consumer prices punish savers by forcing the U.S. dollar valuations lower.
“This is the number one reason why I am bullish on something like Bitcoin,” said Anthony Pompliano, investor at Pomp Investments, in January 2021.
“It is the single greatest protector of wealth in the world. There is extreme volatility in the short term, but over a long period of time, Bitcoin shines. It does a great job of preserving purchasing power and avoiding the perils of fiat currency devaluation.”
Meanwhile, some analysts anticipate Bitcoin to continue declining, much in line with what Brandt hinted. One of them includes Richard Durant, an analyst at Morgan Stanley, who called Bitcoin a “sentimental asset” that cannot rise without positive price catalysts, adding that “it is unclear at this stage what they could be.”
Analysts at BiotechValley Insights wrote that Bitcoin’s rise against inflation fears does not make the flagship cryptocurrency a hedge. They referred to the May 19 price crash that appeared a week after the U.S. labor bureau reported a 4.2% CPI reading.
“Bitcoin is more correlated to high-risk momentum growth stocks like TSLA than to safe-haven assets such as gold or bonds,” they noted.
Meanwhile, Brandt, who correctly predicted the 2018 Bitcoin price crash, appeared more technically focused on the next market outlook. In March 2021, he had anticipated the BTC/USD exchange rate to hit $200,000 in either the third or the fourth quarter this year.
Meanwhile, Brandt was also the one to decide that he should keep his money in equities instead of cryptocurrencies just as the Bitcoin prices were approaching a breakout move above $12,000 in September 2020. The cryptocurrency closed the year at circa $29,000.
In March 2020, Brandt anticipated BTC to fall to $1,000. But the cryptocurrency reversed its bearish course upon testing upper $3,800-levels as support.
Career trader Peter Brandt is raising eyebrows after crafting a chart comparing Bitcoin’s current price action to historical precedent.
Brandt took to Twitter to ponder whether Bitcoin’s price action is similar to moments in 2018 and 2019 at the start of major periods of decline and stagnation.
ANALOGs?$BTC pic.twitter.com/4dpJK3FAfd
— Peter Brandt (@PeterLBrandt) May 19, 2021
Shortly after posting the chart, Brandt said he has no plans to discuss crypto for about a month.
“Through 46 years as a trader I have suffered through some tough trades. I know what it is like to worship at the Porcelain (sic) alter. I am not without feelings and will discontinue Tweeting about cryptos for a month or so knowing some of you are experiencing pain.”
Bitcoin briefly fell more than 50% from its record high in April on Wednesday, to a low of $30,415. While sarcastically noting that the entry of institutional investors was “supposed” to reduce volatility, the career trader points out that the drop is the largest correction since Bitcoin fell 72.2% between June 28th, 2019 and March 13th, 2020.
“Now officially the largest correction since the March 2020 low. But how can this be????? There is supposed to be institutional support. BTC. This was not supposed to happen!!!!!”
On April 23rd, after Bitcoin made a sharp drop overnight from $54,000 to $48,000, Brandt revealed that he had entered buy orders at below the $33,000 mark.
“I have entered orders overnight to buy BTC at $32,501.”
At the time, the flagship crypto asset needed to fall to reach Brandt’s preferred entry price, but his bids may have been filled as Bitcoin plummeted below his order during the recent wild dip.
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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.
