Peter Brandt, a 72-year-old veteran technical trader, has recently warned that bitcoin’s recent recovery could prove to be a dead cat bounce, which would mean the slump isn’t yet over. Brandt notably predicted that if this is a dead cat bounce, BTC will drop to $1,200.
Brandt is a well-known trader, who recently sparked discussion in cryptocurrency circles after a prediction he made in January, that bitcoin would drop 80%, was proven correct. At the time he predicted an under $4,000 price target.
General TA rule — violation of parabolic advance leads to 80%+ decline in value. If general rule is followed, BTC should retrace to <$4,000. Note: This Tweet does not make me a hater. pic.twitter.com/jDNI1osinU
— Peter Brandt (@PeterLBrandt) January 22, 2018
This month, BTC dropped to little under $3,200 before it started to recover. At press time, it’s trading at about $4,100. Speaking to Yahoo Finance, Brandt revealed this wasn’t a difficult call, as other parabolic advances have typically resulted in similar crashes that can go up to 90%.
In the near future, he believes bitcoin will have less drastic price swings, but noted he doesn’t “think it’s going anywhere,” and pointed to the $4,600 mark. Per Brandt’s words, a bounce above $4,000 will mean the cryptocurrency’s recent recovery is a dead cat bounce, and not a bull rally.
If this is indeed a dead cat bounce, Brandt predicted a $1,200 low is in store for BTC, if the cryptocurrency drops below the $3,000 mark by the end of Q1 2019. The $1,200 mark, he added, is a high reached back in 2013.
“It’s a possibility, this is a strong downtrend. There is a tendency in bear markets to retest previous highs … but then I think it gets exciting again”
He added “crypto won’t have any friends at that point,” as the bear market will see “crypto die-hards” question their position in the market. The trader has, however, been careful enough to point out his predictions don’t mean he is a bitcoin bear.
This year Brandt has pointed out bitcoin could once again get to its all-time high, if it survives the current downtrend. Earlier this month, he claimed bitcoin had entered a stage in which “weak money capitulates and strong hands accumulate strategically.”
When asked about these strong hands, he noted he knows they are indeed buying BTC, while keeping hedged positions.
I know for fact strong hands are buying into the weakness in BTC on scale down, even though I know they are hedged with CME futures for now.
— Peter Brandt (@PeterLBrandt) December 7, 2018
Speaking to CryptoGlobe Mati Greenspan, a senior market analyst at eToro, noted we could in the near future see a “Santa Claus” rally, as we’re seeing an “excellent setup for the market to try and form a bottom.”