- Crypto Analyst predicts a significant correction to $7,000 as Bitcoin price shows increased correlation with the stock markets
- Once the pattern is completed Bitcoin will likely resume its uptrend and break the $10,000 resistance level
- Some traders believe that Bitcoin is set for breakout even without the short-term bearish correction
A crypto analyst tweeting under the pseudonym Smart Contracter believes that the world’s top cryptocurrency is preparing for a significant correction as BTC price continues to show increased correlation with the stock market. He gained reputation by accurately predicting the Bitcoin bear market bottom in 2018.
Short-Term Bear Market for Both Bitcoin and Stocks
Smart Contracter says he is short-term bearish on both Bitcoin and stocks:
“Equities and BTC both look cooked. This is not re-accumulation, sorry.”
The analyst’s current sentiment aligns with his previous analysis, in which he identified that Bitcoin and the S&P 500 have been in high correlation ever since the coronavirus pandemic in February. We have previously reported about this correlation in an article about stock-market legend Jeremy Grantham’s warning about a major bubble development.
Both Markets Undergoing an ABC Corrective Wave
btc and equites correlation.
i’ts hard to deny that since the feb corona virus top equites and btc have been HIGHLY correlated to each other.
I was bullish on btc here but am beginning to think a 5 wave move up and larger abc down may now be underway. pic.twitter.com/HQUqpHnHl7
— ??Benjamin Blunts?? (@SmartContracter) June 16, 2020
According to Smart Contracter both asset classes are in the midst of an ABC corrective wave, which is an Elliott Wave principle suggesting a temporary retracement in a bullish market. The analyst believes that the Wave C will drive Bitcoin all the way down to $7,000, while the S&P might be headed towards the lows of around 2,600.
Once the pattern is complete, the asset will likely resume its uptrend, possibly even breaching the psychological resistance of $10,000 and skyrocketing above $12,000.
Correctly Predicted the 2018 Bottom
Based on his expertise in Elliott Wave principles Smart Contracter has correctly predicted the bottom of the Bitcoin bear market of 2018. Bitcoin hit the bottom on December 15th, 2018, while the trader gave his $3,200 bottom prediction almost six months earlier.
Im calling a bottom at exactly 3.2k with a 200 dollar leeway either side.
Will retweet the shit outta this when it happens.
— ??Benjamin Blunts?? (@SmartContracter) June 23, 2018
Not All Traders Are Bearish
Naturally, not everyone agrees with the short-term bearish sentiment of the top cryptocurrency. Scott Melker, for example, has recently tweeted to his 101k followers, that Bitcoin is set for a significant break out if volume picks up:
“BTC – the inverse head and shoulders is no longer a meme, although I am not in love with the volume. If there’s a retest of that neckline as support, we want to see serious volume on a bounce.”
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