Veteran trader Peter Brandt has cautioned that Bitcoin (BTC) could experience one more major correction before reclaiming its all-time high near $125,000, even as broader sentiment across the crypto market remains optimistic.
Brandt Warns of a Potential Shakeout Before New Highs
In a recent market analysis, Brandt outlined two possible outcomes for Bitcoin’s short-term price trajectory. The first scenario involves a sharp shakeout, potentially pushing BTC to lower levels before a rapid rebound to new highs within the next week.
“Either a huge shakeout, which would be confirmed by an ATH quickly within the next week or so,” he said. However, Brandt also warned that a “violation of the parabola” could trigger a steeper decline, adding that such a break in structure has historically resulted in price drops of up to 75%.
“I think the day of the 80% decline is over, but perhaps back to $50,000–$60,000 to test the lower skin of the banana,” Brandt explained, using his trademark metaphor for Bitcoin’s parabolic pattern.
Weekend Crash Follows U.S. Tariff Shock
The recent bout of volatility came after U.S. President Donald Trump announced a 100% tariff on Chinese goods, sparking panic across global financial markets. The move led to over $19 billion in crypto liquidations, with Bitcoin dropping from around $121,000 to $102,000 in a single day before rebounding to roughly $112,400, according to CoinMarketCap data.
Market analysts say the decline served as a harsh reminder of the dangers of excessive leverage. Charles Edwards, founder of Capriole Investments, told Cointelegraph that even moderate leverage can amplify losses during sharp market moves.
“This weekend was a reminder you have to be so careful with leverage, and even multiples above 1.5x are dangerous,” Edwards said. “You need to always consider multi-year, long-term risk.”
Despite the correction, Edwards described his near-term outlook for Bitcoin as “up,” suggesting the pullback may already be over.
Analysts Remain Optimistic on Bitcoin’s Outlook
While short-term volatility has rattled traders, many analysts remain confident that Bitcoin’s long-term trajectory remains bullish. They point to improving macroeconomic conditions and potential monetary easing as catalysts that could fuel another rally.
Arthur Hayes, co-founder of BitMEX, said on X (formerly Twitter) that now might be a prime buying opportunity, referencing comments from Federal Reserve Chair Jerome Powell that quantitative tightening has ended.
“Back up the truck and buy everything,” Hayes wrote, implying that a renewed era of quantitative easing could boost liquidity and drive crypto prices higher. Historically, such policies have benefited risk assets like Bitcoin by making borrowing cheaper and increasing capital flow into the market.
Macroeconomic Factors Signal ‘Goldilocks Zone’ for Bitcoin
Pav Hundal, lead analyst at Swyftx, noted that Bitcoin’s outlook is increasingly tied to macroeconomic trends, particularly U.S. inflation and employment data.
“The fundamental economic data is the big story for Bitcoin right now,” Hundal said. “Inflation is facing a double whammy from lower oil prices and weaker demand, while the U.S. labor market is showing signs of distress.”
With U.S. inflation rising to 2.9% in August, its highest level since January, analysts believe the Federal Reserve may opt for further rate cuts to stimulate growth. Hundal described this as a “Goldilocks zone for Bitcoin” — an environment where easing monetary policy and cooling inflation could encourage fresh capital inflows into crypto markets.
Lyn Alden Sees Favorable Quarter Ahead
Macro strategist Lyn Alden echoed that sentiment, saying on a recent podcast that she expects the coming quarter to be “pretty favorable” for Bitcoin. Alden highlighted improving liquidity conditions and reduced pressure from the Fed as potential tailwinds supporting Bitcoin’s next leg upward.
What’s Next for Bitcoin?
As Bitcoin continues to trade above $110,000, the market faces a crucial inflection point. A clean break above $125,000 would mark a new all-time high, potentially confirming the continuation of its current bull cycle. However, a deeper retracement could test trader conviction, particularly among leveraged participants.
Despite the uncertainty, analysts agree on one point — Bitcoin’s long-term fundamentals remain strong. With institutional adoption growing and macro trends turning favorable, any near-term pullbacks could ultimately serve as opportunities for accumulation before the next major rally.
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