Famed growth investor Louis Navellier warns that Bitcoin could see an inexorable crash
Navellier & Associates founder Louis Navellier predicted that Bitcoin could experience a grueling 80% correction.
The U.S. Federal Reserve tapering its bond purchase program will be the biggest headwind for the cryptocurrency, according to the prominent money manager:
The Fed is shrinking, which should create a correction in risk assets, of which bitcoin is a part. The more the Fed declines, the more volatility we should see in stocks and bonds – and yes, bitcoin too.
Bitcoin has been range-bound over the past two weeks, failing to gain a footing above the $59,000 resistance level on seven occasions over the past two weeks.
As of press time, the flagship cryptocurrency is changing hands at $ 56,676 on Bitstamp. It is down about 17.5% from its record.
A scary pattern
Navellier believes that Bitcoin could end up forming a scary double-top pattern if it continues sliding lower.
The highest cryptocurrency dipping below the $ 28,500 level should be a big red flag for the bulls.
In such a case, a double-top formation would be confirmed, and Bitcoin would be on track to collapse back into four-digit territory.
While such bearish predictions may seem extreme, it’s not as if Bitcoin hasn’t had its share of massive price drops. In December 2018, it recorded an 84.5% correction from its previous bullish peak of around $ 20,000.
Such a correction would be in line with Bitcoin’s previous drawdowns:
I would take a drop below $ 46,000 (the 200 day moving average) to be a yellow flag and a drop below the spring low of $ 28,500 to be a massive double top completed which indicates a drop below of $ 10,000, which incidentally would correspond to many of the multiple declines of 80% and more in its history.
