Has Bitcoin Found its Bottom or Is More Pain Ahead?
- “The moment equities shit the bed again Bitcoin will follow” – trader Cantering Clark
- In the short-term, BTC price is expected to rise only to yet again drop below $5,000
In a massive and violent sell-off in Bitcoin resulted in the crypto asset losing more than 50% of its value to fall to $3,850, a level last seen in March 2019. On crypto derivatives exchange BitMEX, the price of BTC went as low as $3,600.
The worst day in crypto has been the third biggest drop ever in bitcoin’s history. Does this mean, the world’s leading cryptocurrency has found its bottom of this cycle?
According to some like pseudonymous bitcoin maximalist, Loomer, bitcoin has printed a bottom and is likely to consolidate in a range for a while now.
However, others like trader Cantering Clark believes this isn’t the end of pain for the flagship cryptocurrency.
“Bitcoin has not bottomed because equities have not bottomed,” said Clark.
Equities haven’t bottomed so Bitcoin hasn’t too
Crypto market along with stocks, bonds, gold, and other assets have been in a downturn for the past month amidst the concern about the economic impact of the spreading coronavirus (Covid-19).
The US stock market recently had its worst day since 1987 while gold saw its highest weekly fall in eight years.
In 2008 Gold sold off nearly 30% peak to bottom on a global margin call before rebounding strongly pic.twitter.com/BKei3aCfwO
— skew (@skewdotcom) March 15, 2020
But equities haven’t bottomed yet because “We essentially just went from Bull market to Bear market in under 20 days,” argues Clark. Not to forget the true extent of the effect and damage from coronavirus is yet to be revealed.
“This began as an exogenous event and turned into something that now permeates the largest & most fundamentally important industries in the global economy. The financial industry, the travel industry, the oil industry,.. everrrryttthinnggg.”
The current scenario he said is a combination of 9/11, ‘08 crisis, and dot-com bubble.
“Bitcoin will be free to put in whatever positive price action it can when the major markets idle,” but “the moment equities shit the bed again Bitcoin will follow.”
The price of Bitcoin will remain volatile and could still drop significantly.
In the unlikely event that systems completely shut down, you will want to own some more than ever, regardless of price.
— The Wolf Of All Streets (@scottmelker) March 15, 2020
Bitcoin will emerge from current calamity stronger than ever
In the short term bitcoin is expected by traders to test the $6,200-$6,400 region but only to short BTC at that point. The digital asset could very well revisit $4,500 which will be the point we will find if the bottom is really in or not.
Still consolidating but not looking great in low TF. Might head lower before climbing up.
I think we will still revisit $6.8k in mid term.
After that… I think it's not gonna be great with the recession and Covid19 in the early stages with the halving at this price.
Stay safe. pic.twitter.com/y79rNZgGns
— Squeeze (@cryptoSqueeze) March 14, 2020
According to economist and trader Alex Kruger, once BitMEX is done with its liquidations, prices will go up, a lot. However, he doesn't expect this rally to continue for much longer time-wise as it’s a short-term play.
“A counter-thesis is that once Bitmex is done with liquidations and funding goes back up, it will again become attractive to short. That may not be very relevant though, as credit risk has now become a real issue and not as many traders want to keep funds at exchanges,” said Kruger.
Crazy how we are still going to $30k
— Angelo฿TC (@AngeloBTC) March 13, 2020
All in on, the faith in bitcoin hasn’t been shaken as Tyler Winklevoss, co-founder and CEO of crypto exchange Gemini said,
“Bitcoin was born in 2008, during the winter of our financial discontent. It has already weathered much to be here, and it seems unlikely to give up anytime soon. It will emerge from this current calamity stronger than ever. Decades are not measured in days.”