Peter Brandt, a veteran financial analyst and trader, is questioning whether Bitcoin price has more upside in the near term

By Selena On Jun 1, 2021

Peter Brandt, chief executive of global trading firm Factor LLC, questioned if not asserted, the longevity of the ongoing relief rally in the Bitcoin price, especially after a 50%-plus price crash.

Challenge to $BTC price historians
In 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

— Peter Brandt (@PeterLBrandt) June 1, 2021

Peter Brandt is questioning whether Bitcoin price has more upside in the near term

Peter Brandt, chief executive of global trading firm Factor LLC, challenged Bitcoin price historians. Brandt is the one who correctly predicted the 2018 Bitcoin price crash, appeared more technically focused on the next market outlook. In March 2021, he had anticipated the BTC/USD exchange rate to hit $200,000 in either the third or the fourth quarter this year.

Peter Brandt, chief executive of global trading firm Factor LLC

According to him, they should identify a single (even one) instance:

When a 50%-plus correction did not lead to at least a 70% correction.
When a 50%+ correction made a new ATH within 7 months.

Brandt explained that, if not asserted, the longevity of the ongoing relief rally in the Bitcoin market, especially after a 50%-plus price crash.

One of the reasons Brandt mentions these two cases is, Bitcoin’s March 2020 rally to an eight-month high above $20,000. If not seven months after falling to $3,850 in March from a long-term cyclical high of $13,880 in June 2019; and the 2013 bull run saw the cryptocurrency rally more than 2,450% in eight months after bottoming near $45 in an overnight 80% crash.

Bitcoin price action from April–November 2013 trading session | Source: TradingView

However, to Brandt, neither of these two cases makes sense as the price of Bitcoin took another month to regain their record highs in both cases. However, the veteran’s questions are still confusing enough due to its selective timeframe and about what they are trying to prove about the bias of the crypto market in the first place.

Analyst Willy Woo predicts that Brandt is trying to forecast a further drop in the Bitcoin market. And this prediction is based on the historical reaction of the cryptocurrency to the 50% excess price correction event.

However, Woo disagreed with Brandt. Because, based on the fundamentals, a bearish market outlook is unlikely.

Woo responded:

“All drops of that scale with long recoveries was from a starting point where the 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.”

Bitcoin faces the prospects of falling further even after its price made a strong recovery after crashing from $65,000 to $30,000 in May 2021. Before that, the record high of $65,000 was mainly due to investors seeing its scarcity as a safeguard against higher inflation. In retrospect, interest rate suppressions, a $120-billion bond purchasing program, and the United States government’s trillions of dollars worth of stimulus packages — aimed at curbing the aftermath of the COVID-19 pandemic on the U.S. economy — led investors to risk-on assets, such as Bitcoin and stocks.

On May 12, the U.S. Bureau of Labor Statistics revealed that the country’s Consumer Price Index (CPI) had risen to 4.2% year-over-year, logging its fastest climb since 2008. That tends to increase Bitcoin’s appeal among individuals and organizations looking for hedging against inflation in the long run, especially as higher consumer prices punish savers by forcing the U.S. dollar valuations lower.

Furthermore, Bitcoin’s rise in the face of inflation fears does not make the leading cryptocurrency a hedge. They refer to the May 19 price drop that came a week after the US labor agency reported a CPI of 4.2%. Bitcoin is more correlated with risky momentum stocks like TSLA than it is with safe-haven assets like gold or bonds.

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