Bitcoin stalled as it neared its all-time high. In just a few hours, the market wiped out several billion dollars, once again revealing its extreme volatility. Despite this marked correction, several analysts maintain a bullish scenario, believing that this decline does not call into question the underlying trend.
In brief
- Bitcoin suffered a sharp drop from $121,000 to $102,000 in a matter of hours, leading to $19 billion in liquidations.
- Peter Brandt evokes two scenarios: a “shakeout” followed by a new ATH at $125,100, or a trend break with a fall towards $50,000 – $60,000.
- Charles Edwards warns of the dangers of excessive leverage, even from 1.5x, in a market that is still very unstable.
- Arthur Hayes sees the end of monetary tightening as a massive buying signal for cryptos.
Towards a final correction before the summit?
As Bitcoin ETFs face major outflows, financial markets veteran Peter Brandt claimed in a recent statement that the flagship crypto could reach a new all-time high in the coming days, but not without turbulence.
He consider two distinct scenarios: “either a huge shakeout, which would be confirmed by an ATH in the coming week or a violation of the parabola, which has always led in the past to a drop of 75%”.
Here is how he details the two possible trajectories for BTC:
- The bullish scenario: a strong correction (shakeout) followed quickly by a rebound towards a new ATH around $125,100;
- The bearish scenario: the breakdown of the current parabolic structure, which could cause the price to fall towards $50,000 – $60,000, without however returning to the 80% declines observed in previous cycles.
This analysis comes after a brutal correction that occurred on Friday, following Donald Trump's announcement of new 100% customs duties on Chinese products. In a matter of hours, bitcoin fell from $121,000 to $102,000, triggering nearly $19 billion in market-wide liquidations.
For Charles Edwards, founder of Capriole Investments, this extreme volatility is a direct reminder of the dangers of using leverage. “This weekend was a reminder of how dangerous leverage can be, even beyond 1.5x”he warned.
Despite the price's recovery around $111,000, caution remains in order. The combination of sudden geopolitical events and over-leveraged positions continues to undermine market stability.
A macroeconomic situation favorable to bitcoin?
Beyond technical fluctuations and sharp corrections, some analysts believe that current macroeconomic fundamentals could support a bitcoin recovery.
In a recent publication on “Bring out the trucks and grab everything on the market”he wrote, in reaction to the implicit announcement of the end of quantitative tightening.
This monetary pivot, synonymous with a gradual return to more accommodating policies, is historically favorable to risky assets like cryptos.
As for economic analysts, this reading is shared. Pav Hundal, strategist at Swyftx, sees the current situation, falling oil prices, moderate inflation (2.9% in August), weakening of the US labor market, as a particularly promising context for bitcoin.
“All this inevitably leads us to future rate cuts. It’s a Goldilocks zone for bitcoin”he explains. For Lyn Alden, a renowned macroeconomist, the next quarter could prove rather favorable for the entire crypto market.
These elements reveal a potential transition towards a more sustained upward cycle, fueled by monetary easing and the return of liquidity to the markets. However, if macroeconomic fundamentals argue for a recovery, caution remains in order as long as geopolitical uncertainty and the structural volatility of the crypto market remain high, as evidenced by its recent return to the fear zone.
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