Analyst: ‘Vicious’ Cryptocurrency ‘Bear Trap’ Surges Have Resulted in ‘Deeper, Deeper, Losses’

Omar Faridi

Russ Mould, the investment director at AJ Bell, one of the largest providers of internet-based trading platforms in the UK, recently remarked that the current cryptocurrency bear market is similar to those “we’ve seen before across a wide range of asset classes.”

Mould, an experienced capital markets analyst, told MarketWatch:

This brutal bear market [has seen a] succession of rallies [that] have tempted true believers and speculators alike to hold on, or even dive in again, only for those surges to become vicious bear traps, leaving holders of the cryptocurrency facing deeper and deeper losses.

BTC Price Just Above August 2017 Trading Range

Bitcoin (BTC), the flagship cryptocurrency, is currently trading at around $3,450 - down considerably from its all-time high of nearly $20,000 in December 2017. Going on to point out that BTC price is down over 80% from ATH, Mould observed that bitcoin’s present value stands just above what it was trading for in August 2017 “before the mania took hold.”

Bear Market Rallies “Dragging Investors Deeper Into The Mire”

Drawing comparisons to the Dot-com bubble, which many other analysts have now made, Mould warned that investors should be careful and exercise good judgement before making investments into speculative or emerging asset classes. Specifically, Mould cautioned against the typical short-lived bear market rallies. He gave the example of the technology-focused Nasdaq Composite which saw multiple rallies in the early 2000s.

However, the Nasdaq Composite never fully recovered until April 2015. During this period, there were “at least eight [rallies that] failed and dragged investors deeper into the mire before the benchmark bottomed in March 2003 after a top-to-bottom loss over 75%.” According to Mould:

Even if bitcoin is over the worst, it may be a long road for those who piled in near the top.

Tone Vays: Best Case Scenario Is $3,000 BTC Price Consolidation

On December 12th, well-known technical analyst Tone Vays released a video in which he noted that the next few months for BTC don’t look too good - based on his analysis of the cryptocurrency’s price movements. Vays made comparisons to how bitcoin’s bear market ended in 2015, and remarked that BTC price does not appear to have found a bottom or reversal.

Vays also said that bitcoin price movements in the past few months suggest there are better chances of a further downward momentum ahead, instead of a recovery. The best case scenario for BTC price, according to Vays, would be a few months of consolidation at the $3,000 mark as he believes bitcoin price could drop as low as $1,500. According to the YouTube commentator, this trend may continue until April next year, however, there are also chances that bitcoin may rally to the $5,000 price range and possibly higher toward the end of 2019.