Closely followed crypto analyst Nicholas Merten says Bitcoin (BTC) could be mirroring a technical price pattern previously displayed in the S&P 500 index.
In a new strategy session, Merten tells his 488,000 YouTube subscribers that BTC may be following the same pattern that the S&P 500 went through between 2000 and 2008, but on a much smaller time frame.
Merten looks at how in 2008, the S&P 500 rallied to $1,500 before correcting all the way down to $770 and then repeated the entire process over the course of 4 years.
As the crypto markets correct in price, Merten says that institutions may be waiting for this pattern to play out before getting an optimal entry point.
“Institutions, big buyers who need to build massive positions, love no period better than the one when markets are quiet, kind of stagnant, they’re not feeling the euphoria, They love to buy during these discount opportunities. They enter in slowly, they buy into the fear. They’re the ones setting the bottoms here.
I think that’s what we’re seeing here guys. I think we’re replaying history here from the S&P 500, in crypto markets. But instead of, we’re looking at monthly candles here, I’d say this is more of the weekly chart… Things happen a lot quicker in crypto because it’s a much smaller market.”
If the pattern plays out, Merten sees Bitcoin dropping approximately to the $30,000 level, before rebounding again and resuming an uptrend.
While the scenario may look grim, the crypto analyst says that it would be more of an opportunity than anything else.
“Even though I think that price is going to pull back here, this isn’t a reason to panic sell, step out of the market and run for the hills. In fact, it may be only the catalyst to set up a long-term accumulation pattern that will then allow for Bitcoin to regain market dominance, spring higher, and revisit that $150,000 to $100,000 level that we’re confident in enough. But outside of that as well, give altcoins a major opportunity to be able to start to instill even more market dominance than it has in this cycle.”
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