Legendary crypto trader and technical analyst Peter Brandt is asking Bitcoin bulls two difficult questions.
In a new tweet, Brandt asks his 523,000 followers two things about the historical price action of Bitcoin as the world’s largest crypto by market cap struggles to reclaim $40,000 after a 50% drop.
“Challenge to $BTC price historians
In the past 10 years (since May 2011) please identify a single (even one) instance:
1. When a 50%-plus correction did not lead to at least a 70% correction
2. When a 50%+ correction made a new ATH within 7 months.”
Though the question appears to be unanswerable and could suggest that Bitcoin has more downside ahead of it and that a new all-time high for BTC won’t come until at least December, Brandt received a flurry of feedback.
In response to Brandt’s hard questions, widely-followed on-chain data analyst Willy Woo argues that previous large drops happened when Bitcoin was already much higher than what he calls “fundamental valuation.”
“All drops of that scale with long recoveries was from a starting point where price was overextended above fundamental valuation.
This setup is different in that price is BELOW fundamentals.
As a guide, the COVID dump dropped below fundamentals and therefore recovered quickly.”
Woo clarifies that by “fundamental valuation,” he is referring to the Net Value of Transactions (NVT) model, which compares the price of Bitcoin to the total value of all transactions on the network.
Brandt previously called for a “come to Jesus” moment in the crypto markets, two and a half weeks before the sizeable collapse on May 20.
The veteran trader shocked Bitcoin bulls when he revealed on April 23rd that he placed orders to buy BTC at $32,501. Back then, Bitcoin was trading around $58,000.
At time of writing, Bitcoin is trading at $36,835 according to CoinGecko.
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Featured Image: Shutterstock/Tithi Luadthong