Tom Lee Says This Bitcoin Crash Solidifies His ‘Unpopular’ Opinion About BTC
- BTC followed the risk-off sell-off in equities – Tom Lee
- BTC crash was simply driven by stops.
- Upper 7000s is first ideal spot for longs – Alex Kruger
Since Bitcoin first started sliding down from $10,000 hitting $8,025 on Sept. 24, Bitcoin price has been stuck around $8,300. Though yesterday it went up yet again to $8,640, today, BTC has crashed yet again, dropping to almost $7,730.
At the time of writing, BTC was trading at $7,936 with 24 hours loss of 4.62%, as per Coincodex.
This crash Bitcoin bull and Fundstrat’s Tom Lee says “followed the risk-off sell-off in equities,” reinforcing his ‘unpopular’ opinion that Bitcoin doesn’t do well in a trendless macro environment. For BTC to blast off, new highs are needed in S&P 500, he said, adding, “crypto is retail and thus, risk on.”
Bitcoin Misery Index is saying “risk-off”
A couple of weeks back, Lee first shared this idea stating that Bitcoin won’t make a new high until the stock market makes a new high. Since 2019, he notes, the best years of Bitcoin has been when the S&P 500 was up over 15%.
The reason for the leading cryptocurrency being range-bound was because of macro trendless. This he further said is confirmed by the Bitcoin Misery Index.
Even currently, the index is saying “risk-off” that has been the case since July. The index needs it all to 40-53 reading to see better risk/reward and start surging.
BTC crash was simply driven by stops
However, economist and trader Alex Kruger begs to differ as he explains the reason behind Bitcoin’s plunge.
Larger time frame consolidation with stops consolidating at the edges of the range and range awaiting resolution to see who wins drove this fall.
Then, Bakkt disappointment acted as a trigger to a move lower. Once the momentum starts kicking in, large sellers come in at 9300, prior higher low, going for the break. Then, the bottom of the range at 9080/9000 breaks running the stops over in the process and all leveraged positions getting liquidated.
As such the liquidity vanishes and price first tanks to 8500, then to 8000, fast which he says was “expected.” Bitcoin price is plunging for a number of reasons but has nothing to do with stocks crash that responded to US President Donal Trump UN speech about China and impeachment news.
BTC crash was simply driven by stops. As for what’s next, according to him, bears will be in control until either price moves higher and sets in a bear trap, starting at $9,300 but no later than $9,500, or next flush is lower.
“Upper 7000s is first ideal spot for longs (all the 7000s for larger time frame longs),” he added.