Former JPMorgan Exec and Bitcoin price analyst Tone Vays believes Bitcoin (BTC) could drop to the $2.8k level before the halvening.
On around May 10th, the halvening event will immediately halve the block reward for miners, and reduce the supply of newly minted bitcoins to 900 a day.
Tone Vays as Bearish as Ever, or Is That More Bearish?
The past two halvenings has been extremely bullish, especially after the event, but with coronavirus popping all markets’ bubbles, permabear Tone Vays warned of the possibility of another huge drop in price.
On his YouTube channel Trading Bitcoin, Vays said Bitcoin would be in a lot of trouble if support at $4,900 was lost, which could see the price drop down to the next major support of $2,800.
The popular price analyst, who was bearish even throughout the price rise that saw Bitcoin climb to around $14,000 last June. Ironically, it was the day after Vays had claimed Bitcoin was finally in a bull market that the price collapse started.
Vays now believes that last year’s climb to $14k has formed the basis for an 80% correction, which was almost reached last week when we say the price touch $3,800 – a 72.5% drop.
Vays explained that a drop to at least $2.8k is likely before the halvening, and if it stayed around there after the event it would be very worrying.
‘It’s scary after the halving – it’s not scary before the halving. In fact, I always anticipated it before the halving,’ said Vays. ‘So it’s getting there, even if it’s a few weeks before the halving, I am perfectly fine with it.’
Vays is well-known for his bearish sentiment, and has been right on many occasions, especially since January 2018. However, he was spectacularly wrong when he called the bull market last year.
Peter Brandt Doesn't Buy Into the Halvening Narrative
Vays isn’t the only one with a short-term bearish outlook for the BTC price. Prominent trader Peter Brandt is expecting a shakeout before the halvening, and even claimed the halvening was essentially ‘a no-event’ and that the whole idea of it was ‘grossly overrated’.
Brandt claims that Bitcoin’s trading volume is its real supply, because the 1800 daily minted bitcoins was insignificant compared to the total daily volume traded.
A fair point, but to nullify the logic completely is a little wild of the mark. Brandt is obviously a legendary trader, and no doubt the trading volume is a huge indicator, but the fact that the new supply is going to be halved has to play a role in the price.
Bitcoin, like all other assets, is skating on thin ice. Coronavirus isn’t going to evaporate anytime soon. The markets didn’t react to the Fed’s QE package the way you might expect, so we could be in for further drops.
But the thing about Bitcoin, which even Vays and Brandt are bullish about, and that’s the long-term projection. Sure we might see as low as $2.8k, but all this QE and UBI that governments are now promising is perfect for the long term viability of Bitcoin.
We might even need to wait longer for the bull market to kick in than the previous two halvenings. But when it does, I believe Bitcoin will begin to absorb much more of the fiat-induced bubble than ever before.
Author: Tommy Limpitlaw