Analysts warn that the head and shoulders pattern brings a 90% drop in cryptocurrency prices. Are they right?
Apparently, some people bet that the price would fall and now they are spreading fear.
In this case, the short sellers chose ADA Cardano, but neither Dogecoin, nor Ethereum, nor other coins can be hidden from them.
This prediction was made by Peter Brandt, who says that he never shorts altcoins, but only Bitcoin sometimes. OK.
It is clear to you that something is wrong when the analyst must assure you that his analysis is correct by giving an example from 2018 when he was right in some of his predictions.
He spotted a head and shoulders pattern on the ADA chart and now predicts that the price will fall 90 percent and that the target price for short sellers will be 60 percent. So, he predicts that the price of ADA will fall to 0.12 cents, but that short sellers should target the price of 0.35.
Well, I noticed the same pattern on Bitcoin, and on Dogecoin, and on Ethereum, and … You get the point.
In his defense, this does not look good. The head and shoulders patterns are statistically the most accurate of the price action patterns, reaching their projected target almost 85% of the time. Of course, this kind of FUD short sellers expand when the chances are on their side.
But, the other 15 percent is pretty big. Especially when the market is not in a normal state. If it was 2017 now, I would tell you something like “this is not financial advice, but maybe it’s time to start panicking”.
Since it is not 2017, I will tell you “this is not financial advice”.
In 2017, we did not have a worldwide disease. We did not have job losses, company closures. We have not had stimulus checks and money printing to such an extent that everyone, literally everyone, is looking for ways to protect their money from inflation.
Guess who stands out as a hedge against inflation. And when Bitcoin goes up, everything goes up.
Everywhere we can find news that institutional investors are re-entering the cryptocurrency market.
Earlier this week, about $ 2.5 billion in bitcoins moved from exchenges to wallets, a signal that institutional investors expect prices to rise. You can read this in FORBES.
If this previous information is not enough for you, listen to this. I believe not many of you have heard this news. The new law in Germany will allow institutional investors who currently manage 2.1, wait for it, trillions of dollars to invest in bitcoin and cryptocurrencies for the first time.
Special funds, such as pension and insurance funds, will be able to invest up to 20% of their ownership in bitcoin, ethereum and other cryptocurrencies as of Monday.
So, as of Monday, German funds will be able to invest 420 billion dollars in crypto, which is 20% of 2.1 trillion dollars.