Bitcoin (BTC) may be testing $10,000 but further losses would not be unusual, says an asset manager on the 90th anniversary of the Wall St. Crash.
In a tweet on Sep. 4, Raoul Pal said that the past 24 hours’ BTC price declines were nothing out of the ordinary.
Pal eyes Bitcoin buying opportunity
“In the post-Halving bull cycles, bitcoin can often correct 25% (even 40% + in 2017), throwing off the short-term traders (or giving swing traders a shot at the short side),” he wrote.
“Each of those was a buying opportunity. DCA opportunity ahead?”
Pal was referring to dollar-cost averaging investing, which involves buying a set amount of Bitcoin at regular intervals to slowly build up a portfolio.
As Cointelegraph noted, the practice has seen proven profitability for BTC, and payment network Square rolled it out as a consumer feature this year.
Comparing Thursday’s losses even to recent drawdowns from local highs, Bitcoin has fared less badly in context than price indices would suggest.
Bitcoin price drawdowns comparison. Source: ChartsBTC/ Twitter
A knock-effect of the losses was nonetheless a dramatic shift in investor sentiment, according to the Crypto Fear & Greed Index. The Index, just days ago firmly in its “greed” zone, fell by more than 30 points out of 100 on Friday to stand at 40 or “fear” for the first time since July.
Crypto Fear & Greed Index as of Sept. 4, 2020. Source: Alternative.me
Markets hit Great Crash of 1929 anniversary
While analysts continue to eye the potential for BTC/USD to drop to fill a futures gap at $9,700, across macro markets, eerie historical signs are appearing.
As noted by commentator Holger Zschaepitz on Friday, Sept. 4 marks 91 years to the day that markets began their rapid descent during the Wall. St. Crash.
“Just to put things into perspective: After the fabulous gains on the stock market in the 1920s, the crash began just on Sep4th, 1929!” he tweeted.
Just like 2020, the event followed several months of recovery in equities, with economist Irving Fisher infamously saying just beforehand that stocks had “reached what looks like a permanently high plateau.”
Zschaepitz’s words come as others warn about the health of gold, silver and the U.S. dollar currency index. In the case of the latter, after days of gains which coincided with Bitcoin price selling pressure, resistance is incoming, Cointelegraph Markets analyst filbfilb says.
“Careful with this dump, he cautioned subscribers of his Telegram trading channel.
“The other markets are on their last legs. If they survive then we probably do OK here. If they mega dump; you do not want to be heavily leveraged to the longside.”
U.S. dollar currency index daily chart. Source: TradingView
At publication time, Bitcoin traded at around $10,400 after a modest rebound from lows of $10,090, with daily losses still at almost 9%.
This post first appeared here: https://cointelegraph.com/news/bitcoin-market-index-back-to-fear-on-91st-anniversary-of-1929-crash