Bitcoin Analyst Who Called 2018 Bottom Warns ‘Bad Winter’ Could See $10K BTC
Bitcoin (BTC) could dive another 50% from current levels if the coming winter turns out to be a big test for Europe.
That was the conclusion of a seasoned crypto market analyst this week, with BTC/USD failing to regain $20,000 support.
In an interview with Cointelegraph, Filbfilb, creator of the Decentrader trading suite, predicted a potential BTC price bottom entering as low as $10,000 in 2022.
As the European energy crisis intensifies, risk assets face a major test, he believes, and the extent to which crypto suffers depends significantly on how diplomacy can prevail to avert a major emergency into 2023.
The figures are not just pie in the sky; at the height of the last halving cycle bear market in 2018, Filbfilb timed the market bottom perfectly when BTC/USD entered a $3,100 floor.
Cointelegraph reached out for more details on how the upcoming cold season could affect an already fragile Bitcoin trading environment.
Cointelegraph (CT): You pretty much hit $3,100 at the bottom of the last cycle. Is another leg down likely and what price do you think is a reasonable bottom this time?
Filbfilb (FF): As it is now, the price of Bitcoin is highly correlated to the “legacy” markets, especially the NASDAQ, which we know is under great pressure due to the Federal Reserve’s monetary policy. So this time “it’s a little different” because of the high correlation and external economic forces.
Last time it was simply because of the volume attributed to the $3100 bottom and an 85% correction. This time the volume base is around $11,000; $20,000-$10,000 doesn’t have much time-based history.
Much rests on the winter and dynamic with how Europe copes with the winter; I expect a poor winter dynamic to result in testing the previous volume levels of $10,000-$11,000. Dialogue between NATO and Russia appears to be crucial to what happens next; the faster it happens, the higher the low for Bitcoin.
CT: How is the current cycle different from the previous bear market? Does macro play a much bigger role this cycle?
FF: As mentioned above, the correlation with “inheritance” is crucial; Bitcoin has not existed in a rigidly inflationary economy, and it behaves like a risk-on asset rather than an inflation hedge. Therefore, it is somewhat different this time. However, we are correcting within the normal time frame and the usual percentage change to normal for where we are. So it’s “same, same but different” for now.
CT: You recently said that a “Q1 rally seems very obvious.” What makes you so sure?
FF: Two reasons:
First, if you use the Bitcoin cycle starting point as the actual supply halving date, Bitcoin normally exits the bear market after 1000 days or so, which would be Q1, after which the new narrative begins.
Second, we shall be past winter; from a game-theoretic point of view, it seems likely that if things are bad, but Europe navigates the winter economically, then things will look very positive for most of the following year, while if things are bad, it increases the likelihood of dialogue, which I mentioned would provide stability in short term. This could be positive thinking, so I would give this scenario a 2/3 chance.
CT: What do you think about Ethereum switch to Proof-of-Stake? Does it increase the value proposition in the long term?
FF: Hard question; only time will tell, but the reduced emission of coins should be a catalyst for value.
CT: Are you bullish on ETH/BTC (and altcoins) with Merge approaching in two weeks? Or will this be a sell-the-news event?
FF: I am generally bullish on ETH. It is effectively similar to a halving effect. History tells us that we rally in these types of events and then dump shortly after, but the general direction will be up.
I’m keen on this idea, but the big elephant in the room is the CPI data falling around the same time. Much will rest on; positive CPI data and a sell-on-the-news event means that BTC may outperform in the short term, but over the next cycle the case for ETH is quite strong if all goes well.
CT: Were you surprised 3AC collapse? Is the systemic risk still here?
FF: I was surprised that those who provided funding did not do their due diligence on the scheme beyond speculation. But running a business in an area that has grown exponentially results in cutting corners, so it’s not that surprising.
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Naivety is probably the way to see it; everyone believed their own hype and overlooked risk. It is shameful for the financial experts involved who should have prioritized risk over growth. We know the volatility of crypto; to overlook this is amateur at best, careless at worst – given the values involved, it’s probably the latter.
CT: Will this September be when the Fed drains more dollar liquidity via quantitative easing (QT)?
FF: Yes, I think they will show that the Fed has strength and they will raise interest rates on good or bad news. Good news gives them room to do so; bad news means they need it.
CT: Will it negatively affect the BTC price into 2023?
FF: Depends on the winter in the EU. Everyone forgets the relationship between the EU and the US — if the EU gets hammered, the US will suffer; imports will be expensive and demand will suffer.
Let’s see how the winter will be.
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