Ignore the bearish predictions of a 50% to 80% correction – if you want to know where Bitcoin is going, watch what the real insiders are doing.
Over the past three weeks, Bitcoin prices have pulled back around 17 percent from its year to date high of just under US$14,000.
As usual, the price correction has brought out the bears.
Even the celebrated crypto analyst Peter Brandt is now warning of a potential 80% drop if Bitcoin’s current parabolic rise on the charts is violated.
“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. $BTC Note formation of possible 2-wk H&S or H&S failure” he explained in a recent tweet.
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. $BTC Note formation of possible 2-wk H&S or H&S failure pic.twitter.com/6IF1bHREAv
— Peter Brandt (@PeterLBrandt) July 7, 2019
Now, Brandt is a very smart guy and he called the great Bitcoin bust of early 2018 so his warnings can’t be dismissed out of hand like so many other Twitter ‘experts’.
Bitcoin price testing a descending resistance line
Over the past week Bitcoin has been trading between roughly $9600 and $12,000 and frequently testing a descending resistance line.
Veteran derivatives trader and analyst Tone Vays believes Bitcoin’s failure to push past $12,500 means the bears are set to make a big comeback.
He thinks buying at $9000 is a good move, but warns that Bitcoin prices could go as low as $5000 – a 55% correction.
There might not be a Trading #Bitcoin show today as I do not feel like bringing my laptop to #Bip001 conf.But $BTCUSD never went above my Resistance zone of $12,250-12,500 hence NO Bullish Trend Change. I now wait for a Buy opportunity at sub $9k or down in $5-6k
— Tone Vays [#UnderstandBit] (@ToneVays) July 5, 2019
And The Crypto Dog told his 150,000 Twitter followers that Bitcoin needs to hold above $10,500 to avoid a fall to $8750.
Technical Analysis doesn’t ‘predict’ the price
The trouble with technical analysis though is that charts don’t actually make solid ‘predictions’ – they simply show what has already happened and then analysts theorise about what *could* happen if those trends or patterns continue.
A few days before Bitcoin topped out in late June, Brandt was also suggesting a price target of $100,000.
Bitcoin takes aim at $100,000 target. $btcusd is experiencing its fourth parabolic phase dating back to 2010. No other market in my 45 years of trading has gone parabolic on a log chart in this manner. Bitcoin is a market like no other. pic.twitter.com/wE4j3riMgI
— Peter Brandt (@PeterLBrandt) June 22, 2019
Bitcoin’s fundamentals hit all-time highs
Bitcoin recorded a 250% increase so far this year, so pullbacks are not uncommon (as Brandt himself has pointed out).
The fundamentals of the Bitcoin network are also at an all-time high – since January the hash rate has more than doubled to around 75 exahash.
The hash rate represents the amount of computing power protecting the network. It shows that increasing numbers of miners are committing – or investing – more and more resources into mining.
They would only do this if they’re anticipating the Bitcoin price to rise over the medium to long term.
After a horrific end to 2018 when Bitcoin mining was unprofitable, the inside word is that miners have begun hoarding Bitcoin in expectation of a big price rise due to the halving in May next year.
Founder and CEO of digital currency investment firm BKCM LLC Brian Kelly told CNBC’s Fast Money recently that miners are bullish about Bitcoin.
“I’ve talked to a lot of miners around the world, a lot of them have said they have sold enough Bitcoin to get us through the next year or so and we are going to hoardBitcoin at this point in time and we are not going to sell it and the supply of Bitcoin will get cut in half,” he said.
“Just real simple economics: lots of demand hitting little supply, price goes higher.”
The bearish case for the halving
There’s an important caveat to this rosy picture though.
Vays says that if the Bitcoin price doesn’t rise sufficiently, the decrease in the block reward could send many miners out of business.
“Technically, everything is in play until the end of 2020, after that sub $5,000 is not likely.
“Worst Case Scenario: prices drop to $5k into the halving, then after the halving 70% of miners shut down due to negative revenue, Bitcoin spirals down in price but then rises from the dead!”
The post BEARS ARE WRONG: Why miners are banking on a huge Bitcoin price rise appeared first on Micky.