Professional trader Peter Brandt: Bitcoin’s current bull run is behaving “abnormally normal”
Bitcoin’s price is already back to the all-time highs set last weekend after a short-lived but steep sell-off on the back of a potential ban in India. The full correction so far has been only 13% from the top to the bottom – trivial by notoriously volatile crypto standards.
A professional trader who has been involved with the markets for decades says: “The current bitcoin bull run is “abnormally normal” – compared to past crypto market cycles in Bitcoin Era terms of corrections. Here are the factors that may be behind the general lack of volatility, as well as a look at what has happened in the past and could be coming soon.
Bitcoin price pulls back a modest 13%
The bitcoin price is approaching the $60,000 mark again as we speak, after being pushed back from that level last weekend. The week got off to a bloody start, but the hot-trending cryptocurrency shook off what ended up being barely a scratch for the bulls.
A “fake” whale alert, according to Bitcoin researcher Willy Woo, spooked the market and caused a sell-off, combined with some unease around a potential ban in India, as well as a CFTC investigation into Binance.
Despite the negative news and the 13% plunge, Bitcoin has already recovered all of its movement, preventing the kind of corrections and volatility seen even during past bull markets. Compared to past cycles, corrections have been sparse and infrequent so far.
According to legendary professional trader Peter Brandt, Bitcoin has behaved “abnormally normal” in this bull market.
Brandt’s data shows that aside from the 2019 peak and the resulting 71% correction, this entire bull market has only experienced two corrections of less than 32%. During the last bull market, only one of eight corrections was below 32%, while the rest from there ranged up to 41%.
Institutions are buying every dip they can get, and the supply is extremely low. Their existence was always going to reduce volatility in bitcoin (to buy bitcoins by instant transfer guide) as the market capitalisation of the asset grows and more liquidity flows in.
Another factor that could fuel the unprecedented growth is the rapid expansion of the money supply. With so much more money and such a limited supply of BTC, the flood of stimulus money combined with inflation and digital scarcity could be the perfect storm that has been long talked about over the past year since the outbreak of the pandemic.
On the other hand, this could theoretically mean that a major correction is long overdue. Looking at Brandt’s data, the notoriously volatile cryptocurrency has a reputation to lose, so to speak.