Bitcoin (BTC) hasn’t been doing all too hot as of late. The cryptocurrency is down by some 45% from its year-to-date peak of $14,000, sentiment has begun to flip widely bearish once again, and investors have begun to brace for Crypto Winter 2: Electric Boogaloo, so to speak.
While the bearish price pressure has paused for now, with Bitcoin managing to hold around the $8,000 support level for some three weeks now, a top investor warns that Bitcoin has the potential to fall even further. Ouch.
20% Price Drop From Here Possible
Over the past few weeks, the cryptocurrency court has been occupied by bears. The renewed selling pressure began in late-September, with Bakkt’s lackluster launch sparking a sell-off that brought Bitcoin as low as $7,700. Right now, things are stable, with BTC trading at $8,000 with a seeming sense of indirection and indecision.
While undecided on the direction Bitcoin will take in the short term, Mike Novogratz of Galaxy Digital recently said that the cryptocurrency market has the potential to move even lower than $7,700. In an interview with trade publication CoinTelegraph, he said that he could see Bitcoin falling as low as $6,500 — 20% lower than the current price — if buyers fail to keep this market propped up.
Novogratz isn’t the only one eyeing the $6,500 range.
Prominent trader Josh Rager noted that in his opinion, the lowest that Bitcoin will go in this correction will be “between $6,300 and $6,600, [which is] where there is major interest.”
Indeed, as he notes in his chart below, the range around $6,500 has large historical importance, having been the point at which Bitcoin trended at prior to the collapse to $3,000 in November and at which there is mass support.
Have been asked how far can $BTC drop
IMO, the lowest $BTC will hit: between $6300 to $6600 where there is major interest
Price currently bounced off monthly support & if this area breaks could head to $6600 – based on higher time frames pic.twitter.com/sBiKFu7qAc
— Josh Rager 📈 (@Josh_Rager) September 29, 2019
Bitcoin to Return to $20,000
While Novogratz claimed that another 20% drop is entirely probable, that isn’t to say that he’s long-term bearish.
Speaking to CNN’s Julia Chatterley in a recent segment for “First Move”, the former Wall Streeter turned cryptocurrency fund manager and investor said that he expects for Bitcoin to hit $20,000 in 18 months’ time. This would represent a 150% move from current levels if it plays out.
Value versus Utility? “Gold has a 9 trillion USD mkt cap, yet you can fit all mined Gold in a 25 metre cube. It's valuable because we say it's valuable.” @novogratz argues $BTC is the same, but other #Cryptocurrencies will need to be "used" and that will take time $BTC #XRP pic.twitter.com/kwaniSsEqz
— Julia Chatterley (@jchatterleyCNN) October 11, 2019
Novogratz has backed this optimism by looking to a confluence of (potentially) bullish factors. One of these is institutional investment, through service providers like Bakkt, which he believes will bring a mass influx of capital into Bitcoin markets that were not available before.
The Galaxy Digital chief also looked to the macro trends that may favor Bitcoin: negative interest rates, geopolitical unrest, and mistrust in centralized systems.
Negative interest rates, which will be passed onto the consumers through negative-yielding savings accounts, will force consumers to look for alternatives like Bitcoin. Geopolitical unrest and mistrust in centralized systems, which is caused by the seeming growing encroachment on liberties and the world’s addiction to debt, is expected to lead investors to alternative systems, which many believe will be underpinned by Bitcoin and other decentralized technology.
Just look to Hong Kong as a perfect case in point. Due to the protests and the unrest rocking the Chinese region, locals have been flooding ATMs, who presumably are doing everything in their power to secure their wealth.
The issue is, there have been multiple reports that the ATMs have been running out of money, as many banks have been shut down or closed due to vandalism. Many in the cryptocurrency community have said that Bitcoin is the perfect solution to these issues, as the cryptocurrency allows one to always have control over their wealth, making bank runs impossible.