Michael Burry, the famous hedge fund manager who famously predicted the housing market crash in 2008, believes that Bitcoin is currently in a “bull trap.”
In a recent tweet, Burry said that he believes the current Bitcoin rally is being driven by “euphoria,” and that the digital currency is likely to fall back down to earth soon.
Burry’s comments come as Bitcoin prices have surged to new all-time highs in recent weeks, with the digital currency now trading above $17,000.
It remains to be seen if Burry is correct about Bitcoin’s future price movements, but his bearishness on the digital currency is notable given his track record of prescient market calls.
Michael Burry returned to talk about Bitcoin this Thursday (24), stating that the currency is going through a moment of bull trap. It is worth noting that the price of cryptocurrency had fallen significantly in recent days.
- Institutional investors take advantage of the Bitcoin price correction to accumulate the asset
- Israel tests national digital currency based on Ethereum
- Ethereum, the second most valuable cryptocurrency in the world, loses 50% of its value in a few days
Last Sunday (20), the Bitcoin price fluctuated between US$ 35,750 and US$ 31,251.00. In the second (21), the fall was even more marked, with the price of the currency falling to US$ 30,000 for the first time since January.
After the initial scare of the week, the quotation of Bitcoin in dollars today is US$ 34,000, showing a quick recovery in the market. Not everyone is confident the recovery will be sustainable.
Michael Burry believes Bitcoin runs through Bull Trap
Michael Burry is a legendary figure in investing, being a trader aware of market opportunities. In 2008, for example, he predicted the bubble in the US housing market and made billions betting against the frenzied market rally.
Quoted even in the movie “The Big Bet”, Burry doesn’t usually share good feelings about Bitcoin. In recent days, he even ended up on a list of cryptocurrency haters on Twitter, made by Peter Schiff.
This Thursday (24), seeing the recovery of Bitcoin after the recent fall earlier this week, Michael Burry returned to comment on the digital currency. For him, looking at a Bitcoin price chart, the moment is a clear Bull Trap.
“Trapped bulls often fall into the latest support.”
What is a bull trap?
In a bearish market price trend, on any asset valued in a technical analysis, the price tends to rise. That is, the fall in the market usually has high intervals, being called bull trap, or “bull trap”.
Anyone who analyzes the sudden rise and believes the fall is over can buy again in the market. However, the fall has returned, leaving new buyers stuck in what appeared to be an optimistic position.
Thus, Michael Burry believes that the Bitcoin momentum is only a momentary rally, but that further falls are likely to happen in the market soon. The legendary investor’s warning comes at a time when the price drops 11% in the last 30 days, against the Dollar.