Former Bitcoin Short Seller Paints Bearish Picture
Recently, Mark Dow, a preeminent hedge fund manager and skilled chartist, took to Twitter on Tuesday to make an unexpected declaration. In a tweet seemingly poking fun at crypto’s zealous bulls, Dow wrote that he would be saying goodbye to his Bitcoin (BTC) short, which he purportedly opened during the asset’s peak in late-2017.
In a phone interview with Bloomberg, the ostensible Bitcoin bear made it clear that his tweet wasn’t made in jest, adding that he was “done” with the position. Speaking to the outlet, Dow explained that he doesn’t “want to try and ride this thing to zero,” potentially indicating that he sees some semblance of value in BTC. Equating his anti-BTC forecast to a lemon, he stated:
“I don’t want to try to squeeze more out of the lemon. I don’t want to think about it. It seemed like the right time.”
The current head of a Southern California family office then explained that he already took profits twice this year, making the covering of his controversial short more than logical, especially from a risk management standpoint.
Just a few weeks later, Dow has taken to Twitter again, this time to paint a bearish picture for BTC’s prospects, specifically from a technical analysis outlook. The American economist recently wrote that BTC’s chart remains “beautiful,” but noted that if the asset cannot breach the $5,000 or $6,000 prices levels in a bounce, “cyberbulls” will be in for a tough time.
Dow added that if BTC breaks below $3,200, a long-term line of support as stipulated in the chart below, “even HODELers need to GTFO,” likely accentuating the importance of this line of support.
Still a beautiful chart. If bitcoin can’t bounce to at least 5k-6k soon, it’s a really bad sign for the cyberbulls. And if it breaks down thru the yellow line at any point, even the HODLers need to GTFO. $BTC $XBT pic.twitter.com/FqqyzE1mhb
— Dow (@mark_dow) December 27, 2018
Maybe Not… Bitcoin Fundamentals Still Booming
Although Dow’s call shouldn’t be fully disregarded, his use of traditional markets analysis in crypto threw some for a loop. One Twitter user, who goes by the moniker InvestmentWizard, noted that Bitcoin’s fundamentals are stronger than ever, adding that even if BTC break through the “scary yellow line” the end wouldn’t be nigh for the flagship cryptocurrency.
This isn’t an isolated outlook, far from, in fact. Armin Van Bitcoin, a pseudonymous, yet prominent cryptocurrency zealot, recently claimed that Bitcoin has undergone a handful of developments that made 2018 the project’s most successful year.
Bitcoin saw the 0.16.0 and 0.17.0 installments of its core software go live, the former of which aided SegWit’s arrival to the mainstream. Blockstream also made strides, allowing offline consumers nearly all across the globe to access the Bitcoin blockchain via a series of satellites. And even while the network’s hashrate has recently stumbled, it remains up by 400% year-on-year, accentuating the fact that miners still see value in BTC. The SegWit protocol has also seen an adoption uptick, moving from 10% to 40% from January to now.
Moreover, there is a mass of traders who believe that BTC could break under $3,000, but still have a positive future ahead of itself. Anthony Pompliano, for instance, recently stated that BTC could fall under the aforementioned level, but he remains bullish on the cryptocurrency. He explained that in the end, when you boil cryptocurrencies down, they’re driven by math and software, rather than the nefarious individuals that can plague traditional industries. This is, of course, crypto’s underlying value proposition, and this industry’s fundamental narrative since its earliest days, or blocks if you will.
Title Image Courtesy of Ben O'Sullivan on Unsplash