The veteran trader who accurately predicted Bitcoin’s 2018 crash has issued a new warning that a severe downside may be imminent.
Veteran market analyst Peter Brandt told his 651,800 Twitter followers that if Bitcoin does not recover to its May 31 high of around $32,000 anytime soon, a mass capitulation event is likely, leading to a continued decline.
“Unless Bitcoin (BTC) can close above the May 31st high, this chart could become a textbook example of the famed ‘Drano’ chart pattern.”
Source: Peter Brandt/Twitter
Looking at Brandt’s chart, Bitcoin appears to have broken out of a large sideways channel, with his next solid support on the weekly time frame near his target of $12,700.
In the past 7 days, the price of Bitcoin has fallen from $31,589 to $20,846, a drop of more than 34%. Combined with the target given by Brandt, the risk of Bitcoin continuing to decline will exceed 40%.
Judging from Binance’s Bitcoin transaction data, more and more holders of BTC have chosen to “surrender” to liquidate their positions, suffering huge losses in desperation.
However, there are still some people in the market who took advantage of this plunge to earn more than 2000% return. How did they make it? If you want to know the answer, then you have to understand one of the most popular investment methods at present: 100 times leveraged futures trading cryptocurrency.
What Is the Difference Between It and the Spot?
The traditional spot can only buy up and wait for the rise to make a profit. With 100 times leveraged futures trading, you can either buy up (go long) or buy down (go short), which means that you can take profits whether the market rises or falls. What’s more, you have 100 times leverage to magnify your profits.
How 100x Leverage Works?
With 100x leverage applied, traders can invest 1 BTC to open a position worth 100 BTC by going long (predicting BTC price will be up) or going short (predicting BTC price will be down). If we use 1 BTC to open a short perpetual contract at the price of $32,000 and close it when Bitcoin is trading at $22,000, our profit will be ($32,000- $22,000) * 100 BTC / $22,000 ≈ 45.45 BTC, making the ROI of 3124%.
The picture below is what Pitt24 shared on Bitwells social media:
“At the early of May, I got 3 BTCs at $39,000 each. I thought the market would go up soon, but the next four weeks made me deeply feel what despair is! Later, a friend recommended me to try Bitwells, and I had very good experiences. I deposit 0.5BTC for trading. However, in just 7 days, Jesues, I actually earned 4.5BTCs! It recovered the loss of the previous purchase of coins, and brough me extra $20,000.”
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