Crypto Analyst Predicts ‘Violent’ Bitcoin Reversal – BTC, Ethereum, XRP, Litecoin Forecasts
The founder of Bitcoin alpha fund Adamant Capital believes Bitcoin’s price has “gotten ahead of itself” and investors should brace for a “violent correction”.
According to Tuur Demeester, the breakdown will likely bring BTC well below the high of its current parabolic curve.
“Should $9,000 prove the top (which is not a given) and if then we’d see a 2012-style correction repeated, we would expect after an initial crash to see bitcoin trade in a range between $6,800 and $7,680 (27–44% retrace of the rally)…
We think that, fueled by event-driven demand from China, the price has gotten ahead of itself. When Mr. Market moves from devastating paper losses (~capitulation) to massive paper profits (~greed) in 6 months time, he is experiencing a psychological shock to the system that needs time to be processed.
In our opinion, and as Peter Brandt argues, for this bull market to continue at a healthier pace we need for the FOMO to subside, which will likely happen via a violent correction. After that, we could for a few months see bitcoin trade in a range with lows that are 25% below whatever the high this parabolic curve will produce.”
Even if the Chinese yuan continues to weaken, Demeester says there is likely a psychological price limit that will prevent Chinese investors from buying more BTC.
“On May 5th, the Chinese Yuan started weakening against the US dollar, and 13 days later traded 2.5% lower – a huge move in forex terms. Remarkably, that was also the week that bitcoin broke above the resistance of $6,500. In short, there’s a significant chance that in fact it was Chinese investors who pushed bitcoin in bull market territory this year…
We won’t venture a guess as to how much weaker the yuan could get, but barring a dramatic devaluation it seems reasonable to assume that (especially in the absence of a retail mania) there must be a short-term psychological limit to the price at which Chinese investors are willing to keep buying bitcoins.”
Right now, the crypto market is in the green. Bitcoin is up 3.50% at $7,941 according to COIN360. Ethereum is up 5.35% at $244.54 and XRP is up 4.33% at $0.3988.
Technical analysts at large say despite today’s rally, Bitcoin bulls still have their work cut out for them.
Bitcoin
FXStreet – Bulls need to push BTC/USD above $8,150
Blockonomi – Bitcoin surge to $8,500 or drop to $7,500 hangs in the balance
Ethereum
CoinCodex – ETH rebounds from November 2018 resistance
NewsBTC – Ethereum (ETH) price weekly forecast: more downsides likely
XRP
Blockonomi – Short-term recovery underway, $0.40 holds key
FXStreet – XRP/USD bulls flirting with $0.4000, pennant breakout eyed
Litecoin
Ethereum World News – Bulls sighting fresh increase above $120
Blockonomi – LTC increases past resistance and hits $127
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