Tuur Demeester: BTC needs "a violent correction" before rally continues

09 Jun, 2019
by David Robb
Analysis
Tuur Demeester: BTC needs a violent correction before rally continues

Influential crypto figure Tuur Demeester recently shared his thoughts on the current BTC rally. In a blogpost, he pointed to global economic events as being a key factor driving the new bull market, as well as suggesting that a correction may be on the way.

As many others have claimed, Demeester believes that the weakening of the Chinese Yuan against USD around the same time as BTC starting to rally is not a coincidence: "Capital controls, inflation and capital flight have always proved to be significant medium-term drivers of the Bitcoin price, as early as the 2013 Cyprus banking crisis....when from winter 2015 to winter 2016 the yuan weakened by 10%, there was ample evidence of significant price premiums on Chinese bitcoin exchanges to validate that bitcoin was used by Chinese investors as a portfolio hedge or as a vehicle to move money out of the country".

The Adamant Capital founder believes that the current rally may be happening too soon, and a retracement could well be on the way. He claims that BTC's "current parabolic curve represents the fastest increase in unrealized profits since January 2012...Bitcoin investors are currently realizing profits (selling) at record slow rates compared to the growth in Bitcoin’s market cap — a possible indicator of excessive short term optimism".

Demeester is still bullish for the longer-term, even though he claims that BTC could see a price decline of as much as 25 percent from its current level. This retracement is apparently necessary: "to continue at a healthier pace we need for the FOMO to subside, which will likely happen via a violent correction".

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