Peter Brandt doubts further bitcoin rally

June 1, 2021

U.S. banking regulator

Peter Brandt, a renowned expert and head of Factor LLC, questioned the growth of the first cryptocurrency's price in the short term.

The trader asked "bitcoin historians" to name at least one precedent over the past decade when digital gold renewed its price high after falling by more than 50%.

He also offered to name another case where such a correction did not lead to a 70% drop in the BTC price within seven months.

Challenge to $BTC price historians
In past 10 years (since May 2011) please identify a single (even one) instance:
1. When a 50%-plus correction did not lead to at least a 70% correction
2. When a 50%+ correction made a new ATH within 7 months

— Peter Brandt (@PeterLBrandt) June 1, 2021

One user gave two examples:

  • The 2020 rebound, in which bitcoin broke through the $20,000 mark almost nine months after falling to $3800 in March;
  • The 2013 rally, during which the price of digital gold rose 2,450% eight months after hitting bottom at $45.

Brandt dismissed these examples because in both cases, the cryptocurrency needed an extra month to recover to its former heights.

Analyst Willie Wu suggested that the trader was trying to predict a further market crash based on how bitcoin has reacted to more than 50% corrections in the past.

All drops of that scale with long recoveries was from a starting point where price was over extended above fundamental valuation.

This setup is different in that price is BELOW fundamentals.

As a guide, the COVID dump dropped below fundamentals and therefore recovered quickly.

— Willy Woo (@woonomic) June 1, 2021

According to Wu, Brandt's approach is wrong. He noted that all corrections of this magnitude, followed by long periods of recovery, originated at a point where the price exceeded the fundamental value of the asset.

"This situation is different in that the price is below the fundamentals," Wu stressed.

Later, the analyst specified that the Stock-to-Flow model and NVT indicator can be used to estimate the fundamental value.

Comments asking for expansion of "fundamental valuation".@100trillionUSD's S2F using scarcity valuation of the network is approx $60k while NVT Price using investor volumes puts value at $54.5k.

— Willy Woo (@woonomic) June 1, 2021

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About the author

Hi there, my name is Zalman Weinberg. I'm enthusiast with over 7 years of experience in cryptocurrencies and blockchain. Professional Trader providing Blockchain solutions to Startups and Enterprises. Expert in all cryptocurrency exchange APIs (BitMEX, Bittrex, Binance, Bitfinex, Kraken, Poloniex, Gdax etc.). I have also worked with multiple Forex broker APIs.

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