Pantera Capital CEO Dan Morehead took to Twitter on Wednesday to make the point that the Bitcoin (BTC) market was below trend and “it’s best time to buy” for new investors.
What Happened: Morehead tweeted a chart showing Bitcoin’s deviation from the 11-year trend and pointed out that Bitcoin has only been “this ‘cheap’ relative to its trend 20.3% of the past 11 years.”
For new investors, it’s best to buy when the market is well below trend. Now is one of those times.#Bitcoin has only been this “cheap” relative to its trend 20.3% of the past 11 years.
— Dan Morehead (@dan_pantera) June 16, 2021
BTC traded 2.53% lower at $38,990.66 at press time on a 24-hour basis.
Why It Matters: Morehead also shared the specialist hedge fund’s latest “blockchain letter” with his Twitter following, which pointed to China’s multiple Bitcoin bans, Tax Day, and Tesla Inc (NASDAQ:TSLA) CEO Elon Musk’s 180-degree turn on the apex cryptocurrency as factors for the sharp decline in blockchain markets.
“Investors who sell on China “bans” usually end up bummed…,” said the letter pointing to another tweet by Morehead.
On Tax Day, the letter noted that previous such occasions have hit local lows seven days before Tax Day.
“That’s about how long it takes to get your money out of an exchange and to your bank. The bitcoin market hit a local low near $30,000 two days after Tax Day.” In the United States, Tax Day is Apr. 15, but this year it was pushed to May 17.
Pantera said that humans have an innate herd instinct and going with the momentum is part of human nature.
“Resist the urge to close down positions. If you have the emotional and financial resources, go the other way.”