Market veteran Peter Brandt has suggested that Bitcoin could correct by as much as 75%, citing historical data.
His recent commentary comes on the back of the latest Bitcoin crash below $90,000 on Dec.
1.
Notably, while some market commentators have attributed the drop to a cascading effect from the Japanese yen’s spike, others insist it may have been due toover-leveraged positionsin a low-volume environment, as more than $725 million in long positions has gone bust in the last 24 hours.
Despite the bearish turn of events, some market watchers expect a rebound, butnot Brandt.Notably,Peter Brandthas flipped bearish on Bitcoin, citing historical datafromits cyclical performance tocall attention toa possible 75% correctionfor the price.
Bitcoin Always Crashes 75%+ After Violating Parabolic Advance
Specifically, the market veteranhighlighteda “dominant parabolic advance” that Bitcoin typically observes during its bull run.According to him, Bitcoin has witnessed five bull markets since it launched in 2009, and eachof these bull marketsfeatured this dominant parabolic advance, which he identified as an upward-sloping line that guided theupwardprice action.
Meanwhile, this trendline, which appears on the weekly chart, has done more thanjustguide Bitcoin’s upward push;
it has alsoactedas a reliable indicatorforwhen the bull market hasfaced exhaustion.Brandtfound that whenever Bitcoin’s price broke below the parabolic advance trendline,its pricecorrectedfurtherby 75% or more.
This pattern has played out perfectly over the past five bull markets.
In the first instance, after the 2011 bull rally, BTC dropped below the parabolic line in June 2011 to $15.
In the following weeks, Bitcoin collapsed further, eventually crashing to a low of $1 by November 2011.
This marked an 86% drop.
The same pattern occurred after the 2013 rally, with BTC crashing 80% from $827 in December 2013 to $162 in August 2015.
Bitcoin broke below the trendline again in December 2017 and dropped 77% from $14,059 to $3,125 in December 2018.In the fourth instance, BTCdroppedbelow the trendline in April 2021 and crashed74.2%from$59,980 to $15,479byNovember 2022.
BTC Has Again Violated the Parabolic Advance
Now, a similar structure has taken shape in the ongoing bull market.
Data from Brandt’s chart shows that the current parabolic advance trendline began on the back of the recovery from theFTX-induced crash in November 2022.
BTC had continued to trade above this trendline since then, until the recent market struggles led to a break below the line early last month.
If history is anything to go by,Bitcoincould be on track to record a drop of at least 75% inwhat seems to bean imminent bear market.
For perspective, a 75% crash from the decline point of around $103,000 would lead to a Bitcoin price of $25,750.“You better have a great reason to bet against this pattern,”Brandt said
Meanwhile, analysts like Michaël van de Poppe still believe the bull run remains intact, and this may be just another correction.
Following the latest Dec.
1 crash, hemaintainedthat nothing has changed, predicting a retest of the resistance area between $90,000 and $94,000 with a possible rally to break above the $100,000 mark for the first time since mid-November.
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