Story by: Charles Bovaird
Bitcoin prices recently reached a six-month low, having declined more than 50% from their 2019 high of almost $14,000.
After suffering this pullback, has the digital currency’s price bottomed out?
While many analysts are unsurprisingly bullish in the long-term, many of them are less optimistic in the short-term, emphasizing that the cryptocurrency could easily suffer further losses.
Market observers offered these predictions after bitcoin fell to nearly $6,500 on November 24th, its lowest since May, before recovering, approaching $7,400 the following day, CoinDesk figures reveal.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Bitcoin ‘Overbought,’ Says Analyst
“We don’t see $6.5k as the bottom, although it’s the first strong candidate for that title,” said Tim Enneking, managing director of Digital Capital Management.
“While there might be a move up before it happens,” we expect bitcoin to drop below $6,000 “before this correction is over,” he added.
Analyst Marouane Garcon also weighed in, describing bitcoin prices as “overbought.”
“It’s nakedly obvious that we can’t agree on a true price and it’s still extremely volatile to current events and even fake news,” said Garcon, managing director of crypto-to-crypto derivatives platform Amulet.
“I wouldn’t be surprised if the price continued to drop.”
However, not everyone had the same point of view, as Mati Greenspan, a cryptocurrency analyst who founded the newsletter Quantum Economics, stated that “the retracement from the current peak may soon be coming to an end.”
In his latest newsletter, Greenspan emphasized the following:
“It’s now been exactly five months since bitcoin topped out just below $14,000 per coin. Since then volumes have steadily decreased despite the introduction of Bakkt future contracts and Fidelity digital entering the space. Looking at Bitcoin’s short history, we can see that the average drawdown is approximately 43% and tends to last 122 days.”
“Of course, past performance is not an indication of future results but just by the data, it would seem that the worst of this retracement might just be behind us.”
Several analysts also emphasized the potential impact of bitcoin’s next halving, which is currently scheduled to take place in May 2020.
When this event takes place, the mining reward, which is currently 12.5 BTC, will be cut in half, falling to 6.25 BTC.
Jeff Dorman, chief investment officer of asset manager Arca, spoke to this recently.
While there is “no new money coming in to soak up the supply,” “this supply is about to be cut in half,” he noted.
More specifically, the rate at which new bitcoin enters the market will be cut in half, a development that has frequently been considered bullish for the world’s most prominent digital currency.
Bitcoin has rallied quite a bit following past halvings, enjoying notable price gains following the 2012 and 2016 events.
Original story: https://tinyurl.com/vu6rqgeby