Scary Pattern Could Send Bitcoin Below $10,000, According to This Top Money Manager

Navellier & Associates founder Louis Navellier has predicted that Bitcoin could endure a grueling 80% correction.

The U.S. Federal Reserve tapering its bond purchase program will be the biggest headwind for the cryptocurrency, according to the prominent money manager:

The Fed is tapering, and this should create a correction in risk assets, of which bitcoin is a part. The more the Fed tapers, the more volatility we should see in both stocks and bonds — and yes, bitcoin, too.

Bitcoin has been range-bound over the past two weeks, failing to gain a footing above the $59,000 resistance level on seven occasions over the past two weeks.

At press time, the flagship cryptocurrency is changing hands at $56,676 on Bitstamp. It is down roughly 17.5% from its record high.

A scary pattern

Navellier believes that Bitcoin could end up forming a scary double-top pattern if it continues sliding lower.

The top cryptocurrency plunging below the $28,500 level should be a big red flag for bulls.

In such a case, a double-top formation would be confirmed, and Bitcoin would be on track to collapse back into four-digit territory.

While such bearish predictions may sound extreme, it is not as if Bitcoin has not had its share of massive price crashes. In December 2018, it recorded an 84.5% correction from its previous bull market peak of roughly $20,000.

Such a correction would be in line with Bitcoin's previous drawdowns:

I would take a decline below $46,000 (the 200-day moving average) to be a yellow flag and a decline below the spring low of $28,500 to be a completed massive double top which points to a decline to below $10,000, which incidentally would match many of the multiple 80%+ declines in its storied history.