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- Analyst Dave the Wave suggests Bitcoin could revisit the “buy zone” of his logarithmic growth curve (LGC) model, predicting a 40% drawdown to $44,000 before a potential parabolic surge to $220,000 by the end of 2025.
- Recent data from Deribit shows a significant increase in downside bets among Bitcoin options traders, with the put-call ratio surging above 1.0 suggesting strong bearish sentiment.
A Bitcoin trader who accurately predicted the Bitcoin collapse three years ago in May 2021 is now predicting further downward action for the Bitcoin price before it resumes the rally to a new all-time high. Over the last weekend, the Bitcoin price face strong selling pressure taking a dive under $54,500 before recovering the losses partially, per the CNF update.
As of press time, the BTC price is trading 0.47% down at $57,113.43 with a market cap of $1.126 trillion and daily trading volumes skyrocketing by 56%.
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In his recent post on X, pseudonymous analyst Dave the Wave suggested that Bitcoin could revisit the “buy zone” of his logarithmic growth curve (LGC) model before it finds a local bottom. By design, the LGC model forecasts Bitcoin’s longer-term cycle lows and highs while filtering out the short-term volatility.
According to Dave the Wave, BTC may replicate its early 2017 price behavior, which saw a 40% correction before a parabolic surge. “A similar 40% drawdown just north of the 0.38 Fibonacci level would see $44,000…. with BTC price back to the trendline and the LGC buy zone,” he wrote.
Bitcoin Short-Term Pain Will Lead to Long-Term Gains
The pseudonymous analyst believes that the Bitcoin price correction in the short term would be beneficial to Bitcoin in the longer term. The trader noted that the drawdown would open the gates for a rally by 400% in the next bull run pushing the BTC price all the way to $220,000 by the end of 2025. “Short-term BTC pain, long-term gain,” noted the analyst. Market analysts have also been predicting that Bitcoin could gain significantly with the declining power of USD, reported Crypto News Flash.
The trader emphasizes that downside volatility is an inherent aspect of a Bitcoin bull market. “BTC’ers got to take the good with the bad… still technically in a bull market… Though one might be confident of the final victory, there can also be a hammering along the way.”
Bitcoin Options Traders Increase Downside Bets
As per the recent distribution of Bitcoin options open interest, there’s a growing demand for downside protection among Bitcoin traders. As per the data from derivatives platform Deribit, the put-call ratio for Bitcoin options has shot up ahead of this week Friday’s expiry.
A ratio above one indicates that there are significantly more put options than call options, currently trading for Bitcoin, indicating a bearish market sentiment. Deribit data reveals that the largest cluster of options open interest for Friday’s expiry consists of puts at a strike price of $58,000, with substantial concentrations of puts also at the $52,000 and $48,000 strike prices, as reported by CNF. In its report on Monday, the ETC Group noted:
An increase in bitcoin options open interest is largely driven by an increase in relative put open interest, consistent with the asset’s recent price correction, as bitcoin options traders increase their downside bets and hedges. A spike in put-call volume ratios as well as one-month 25-delta option skew signalled a significant increase in demand for downside protection.
