Last January, when Bitcoin (BTC) was trading near all-time highs, veteran technical trader Peter Brandt called for an 80%+ retrace, suggesting a price target under $4,000. Days later, Bitcoin began the year-long downtrend that brought it to a low of $3,100.
General TA rule — violation of parabolic advance leads to 80%+ decline in value. If general rule is followed, BTC should retrace to <$4,000. Note: This Tweet does not make me a hater. pic.twitter.com/jDNI1osinU
— Peter Brandt (@PeterLBrandt) January 22, 2018
In the last week, Bitcoin and other major cryptocurrencies have posted a sizeable relief rally with BTC surging back above $4,000. While many believe the bottom is in, Brandt is far less optimistic, going as far as calling the rally a dead cat bounce.
“I really don’t think it’s going anywhere — maybe $4,600,” Brandt told Yahoo Finance, adding that any price action above $4,000 is more likely apart of the dead cat bounce and not a return of the bull market. If Bitcoin were to break down at these levels, Brandt thinks it will test the $3,000 psychological level and head towards $1,200 by the end of Q1 2019.
Brandt set the $1,200 price target based on the relative highs reached back in 2013, which he believes will serve as a support line.
“It’s a possibility, this is a strong downtrend,” he said. “There is a tendency in bear markets to retest previous highs… but then I think it gets exciting again.”
Bitcoin has a number of upcoming fundamental events that could help bring buyers back into the market, including the launch of Bakkt’s Bitcoin futures product, but confidence is low as no rally has been able to hold its momentum in 2018.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.