Although bitcoin is already more than 30% down from its ATH marked last month, Peter Brandt believes that the asset might not have reached its bottom yet. The CEO of Factor LLC noted that there hasn’t been a high volume panic capitulation yet to outline that bottom as with previous corrections.
It was just over a month ago when the entire cryptocurrency landscape was highly bullish on positive developments coming from all directions. Perhaps the most notable news at the time – that the US will finally have a Bitcoin ETF, even if it’s a futures-based one – propelled a massive rally culminating in breaking the previous all-time high and registering a new one at $69,000.
But a lot can change in the ever-volatile digital asset space, and it did. Instead of continuing its 2021 bull run, BTC reversed its trajectory and started to lose value gradually.
Now, less than six weeks later, bitcoin finds itself fighting to stay above $46,000, meaning that the asset has lost more than 33% of its value in this timeframe.
While this is a substantial price decline of its own, the popular trader Peter Brandt thinks that the generally low volume and the lack of “high volume panic capitulation” could mean that BTC is not out of the woods yet.
As Brandt’s chart shows, the trading volumes have remained relatively low, even during the massive crash two weeks ago. On previous occasions, the volumes skyrocketed when BTC was on a downturn, which later on turned out to be the local bottoms.
Arguably the most notable example was in March 2020 when bitcoin dumped by more than 50% in a day when the COVID-19 threat officially became a pandemic. The overall spot trading volumes reached a new ATH, and BTC never went down to those levels again.
With the aforementioned price decline, the general mood among the majority of the crypto community turned negative, which is to be expected to a large extent.
Apart from the Extreme Fear feelings shown by the BTC Fear and Greed Index, the analytics resource Santiment outlined another worrying sign. As bitcoin has remained below $50,000 for a week, the company saw the “most negative trader commentary since early October.”
However, it’s worth noting that BTC typically tends to do the opposite of what people expect from it, which could be a “good sign prices can finally bounce,” said Santiment.