Legendary chartist and trader Peter Brandt has a sobering warning for cryptocurrency investors.
He has stated that Bitcoin could still plunge lower or suffer a devastating "terminal wash-out."
According to Brandt, a market bottom might not materialize until October, which would be a huge blow for the bulls.
A trend reversal
The chart provided by Brandt shows an ascending channel that governed Bitcoin’s price movement from late February through May.
However, Bitcoin collapsed below the lower support boundary of this channel, and a trend reversal is pretty much confirmed at this stage.
Reaching a key moving average
Following the plunge, the leading cryptocurrency has now touched the critical 200-week moving average for the first time since October 2023.
CryptoQuant CEO Ki Young Ju has noted that"this distribution phase feels like a massive change of hands." The average cost basis for Bitcoin investors currently sits around $53,000.
Bear markets tend to conclude after the price capitulates below this realized price.
Ju initially believed this level would be impossible to revisit during this cycle due to massive institutional inflows, but the current data points to relentless selling pressure. The fact that prices have returned to early-2024 levels despite massive ETF buying and corporate adoption indicates that there has been an immense volume of spot distribution from older holders.
"Honestly, in terms of rising asset value, I think traditional financial institution investors might provide an even stronger demand base than Bitcoin OGs. Of course, in that process, some of the cypherpunk values may get diluted. I really regret that part too," he said on X.
In the meantime, gold bug Peter Schiff has noted that Bitcoin is trading below the previous macro peak it established back in April 2021.
Prominent bulls like Michael Saylor publicly expect Bitcoin to compound and rise by over 30% per year over the next five years, but the reality of the past five years shows that Bitcoin’s total return has turned negative for investors who bought the 2021 highs.
Dan Burgin
