Bitcoin has had a brutal 2018.
The world’s largest cryptocurrency by market cap has cratered nearly 84% since its meteoric rise topped out at an all-time high of $19,870 in December 2017.
But just after bitcoin (BTC-USD) peaked, amidst the maddened buying frenzy, veteran technical trader Peter Brandt made a particularly prescient call, which has recently resurfaced in crypto circles. Back in January, he called for an 80% retrace of bitcoin’s parabolic advance, predicting a $3,933 price target. Bitcoin is currently trading around $3,900.
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
Brandt, a 71-year-old trading veteran, told Yahoo Finance it wasn’t a particularly difficult call to make considering other parabolic advances have typically resulted in a similar crash. And he shared his latest bitcoin forecast.
“I’ve seen that sort of thing take place so many times in the past,” he said. “And they always end the same — prices always fall 80% to 90%.”
But now that Brandt’s prediction has played out, he foresees less drastic price swings in bitcoin’s near future, despite a recent rebound from about $3,000 to near $4,000 in just the past week.
“I really don’t think it’s going anywhere — maybe $4,600,” he said, adding that any rise above $4,000 would more likely be a dead cat bounce rather than a true return to a bitcoin bull market. In fact, Brandt predicts a low of $1,200 if the dead cat bounce materializes and bitcoin dips below the key psychological level of $3,000 sometime by the end of 2019’s first quarter.
“It’s a possibility, this is a strong downtrend,” he said, adding that the $1,200 target is around the same high reached back in 2013. “There is a tendency in bear markets to retest previous highs … but then I think it gets exciting again.”
In his original January tweet, Brandt was careful to note that his call for a more than 80% decline in bitcoin’s price didn’t mean he wasn’t a fan of the cryptocurrency long-term prospects. In fact, even after the precipitous fall, Brandt wouldn’t rule out the possibility that bitcoin returns to its December 2017 all-time high. It will just have to survive the potential dip he still thinks could come.
“Crypto won’t have any friends at that point,” he said about bitcoin’s price falling to $1,200. “Even the crypto die-hards might start to think they are done with it.”
Zack Guzman is a senior writer and on-air reporter covering entrepreneurship, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.
The world’s largest cryptocurrency by market cap has cratered nearly 84% since its meteoric rise topped out at an all-time high of $19,870 in […]