Bitcoin is at an impasse: over the past six to seven weeks, the cryptocurrency has been caught in a relatively tight holding pattern that has seen it range between ~$8,500 and ~$10,000.
Every attempt at deviating from this range has resulted in a rejection, with bears and bulls failing to establish a directional trend as the S&P 500 also flirts with topping out.
A top analyst that predicted at which point Bitcoin would bottom in late 2018 recently provided insight into which way the crypto market will likely head next, using the S&P 500 as a guide.
Bitcoin Will See 30% Retracement Before Bounce: Analyst
Six months before Bitcoin bottomed at $3,150, an analyst predicted that $3,200 would be the point at which the bear trend would bottom.
The same analyst is now predicting that Bitcoin will see a 30% retracement in the coming month, noting how the S&P 500 is showing signs that it will see an “ABC” correction lower as per Elliot Wave analysis.
“I was bullish on BTC here but am beginning to think a 5 wave move up and larger ABC down may now be underway,” the analyst commented on the prospects of a move lower in the coming weeks.
After the correction, he expects a bounce towards $12,000.
Stock Market Crash Could Change That
While the aforementioned trader is predicting a slight retracement in the value of equities, a larger equities crash could cancel the medium-term bull case depicted above.
Scott Minerd, the global CIO of investment and financial services firm Guggenheim Partners, recently told CNBC’s “Closing Bell” that the S&P 500 could retrace by almost 50% in the coming months.
His argument boiled down to three core factors: the index broke a technical uptrend formed after March’s capitulation, stocks are extremely overpriced as markets shake off the revenue declines caused by the pandemic, and the “don’t fight the Fed” argument is flawed.
— CNBC's Closing Bell (@CNBCClosingBell) June 11, 2020
Bitcoin will move lower if the S&P 500 does.
As Arthur Hayes, CEO of BitMEX, once said:
“Bitcoin will be owned unlevered. Could the price retest $3,000? Absolutely. As the SPX rolls over and tests 2,000 expect all asset classes to puke again.”
The existence of a correlation was echoed by crypto trader Avi Felman, a trader at the BlockTower Capital. He recently said on the matter:
“If you’re sitting there thinking we’re headed for 11k but that we’re also about to experience a second wave I’d rethink that. If BTC can’t break 10k during a raging equity bull party not sure I see 11k BTC with Hertz below $1.”
Related Reading: Crypto Tidbits: Bitcoin Fails at $10k, Ethereum Coins Explode, Coinbase Looks to Add 18 Altcoins
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Analyst That Predicted Bitcoin's 2018 $3.2k Bottom Thinks This Comes Next