The well-known trading veteran Peter Brandt believes Bitcoin has rough months ahead. Specifically, Brandt suggests that both the premier cryptocurrency and gold – the ultimate counter-cyclical asset – may soon fall to $1,000.
Bitcoin and gold could embark on a “race to the bottom”
These new statements come in a recent tweet from Brandt. Brandt is an avid crypto market commentator, who keeps a close eye on Bitcoin. Now, however, he believes that Bitcoin could join gold in a “race to the bottom”.
In Brandt’s tweet from March 16th, he suggests that the price of gold may fall towards $1,000 per ounce. Moreover, this comes just weeks after the price of gold was trading close to $1,700. Nevertheless, Brandt says the price of gold could soon plummet:
“There should be support for Gold prices under $1400. If price drops below $1300, the $1,050 here we come. #GOLD $GC_F”
Gold is usually seen as the ultimate counter-cyclical asset
This would be particularly notable, seeing as gold is the ultimate counter-cyclical asset. As such, the developing stock market crash should not depress gold prices. If anything, the widespread uncertainty should act to raise the price of gold.
However, as we have seen during the past week, no asset seems to be safe from developing COVID-19 coronavirus concerns. Bitcoin is also often said to be a counter-cyclical asset – “digital gold” – but also fell dramatically last week.
Although observers note several reasons as to Bitcoin’s dramatic fall last week, the most obvious one is growing market panic. This appears to be the same sentiment that is now gripping crypto traders, as cash reigns supreme.
On Twitter, one commenter asked Brandt on his outlook for Bitcoin. According to Brandt, Bitcoin could fall to the same price levels as gold. In fact, Brandt notes that he is “leaning” towards a price target of $1,000 for the premier crypto. Nevertheless, there is still a chance that Bitcoin could soon rally, although Brandt admits it is unlikely:
“Leaning towards $1,000, but there remains one “pie-in-the-sky” bullish chart construction possibility.”
As economic panic follows in the wake of the COVID-19 coronavirus, financial institutions around the world are taking action. However, these actions mainly include lower rates, restrictions on lending and many speculate they will soon include quantitative easing.
This means that the growing economic unrest could soon lead to a weakening of fiat currencies. For example, the US Federal Reserve recently said it would pump in more than $1 trillion into the financial system. It remains to see if this will push investors toward currencies such as gold and Bitcoin.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.