Hedgeye Risk Management CEO Keith McCullough claims that the Bitcoin price bubble is bursting now that the cryptocurrency has entered the Quad 4 phase. At the time of writing, BTC is changing hands at $36,529.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price crashed to below $37,000, and this is why
Bitcoin is struggling to regain its strength, extending its losses. It has dropped to an intraday low of $35,791, the lowest since early August. It has dropped more than 13% within 24 hours after recovering to $43,500 on Jan. 20. A whopping $909 million worth of crypto has been liquidated in the past day. With futures in the red, the US stock market is on track for another tough day, reeling from the increasingly hawkish Federal Reserve.
That’s dead wrong. Bitcoin peaked during #Quad2 in Q4 and then broke TREND front-running #Quad4 in Q1 https://t.co/fIV6GUrob8
— Keith McCullough (@KeithMcCullough) January 21, 2022
Hedgeye Risk Management CEO Keith McCullough explained that Bitcoin topped out in November and then broke the trend before entering the Quad 4 in late December. Last week, he tweeted that he was out of Bitcoin and other motivational risk-based assets.
Hedgeye uses its propriety Growth, Inflation, Policy (GIP) model to gauge market sentiment and forecast asset returns. It is divided into four economic regimes (quads), with Quad 4 usually representing the most unfavorable environment (slowing inflation and slowing words).
McCullough’s words should be salt because the model is not entirely reliable. The analyst has become a source of ridicule in the crypto community after selling his entire Bitcoin in early October for $10,000, claiming that stories and emotions drive the Bitcoin community instead of math. This happened just before the leading cryptocurrency quadrupled in value in just a few months. A separate Twitter account has been created to track McCullough’s poor time trading activity.
The price of #Bitcoin is up $36,624 (345.51%) since Keith McCullough sold
— Keith McCullough sold his Bitcoin (@KeithSold) February 9, 2021
$36,000 will act as a major support level for Bitcoin. If the flagship cryptocurrency drops below the aforementioned price point, it will likely keep plunging all the way back to the $30,000 level. BTC could briefly drop below the support before staging a recovery. A failure to regain bullish momentum will not bode well for altcoins.
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