Fundstrat Global Advisors, LLC – the same company responsible for giving the world Tom Lee and his sometimes outlandish and boisterous bitcoin price predictions – says that it’s likely going to take months for the world’s number one digital asset to recover from its recent falls.
Fundstrat Is Predicting Gloom and Doom for BTC
While the asset is once again above the $6,000 mark – a solid hike from last week’s dismal $4,900 – Fundstrat says that bitcoin is trading for about 40 percent less than where it stood in mid-February. At that time, the currency stood well over $10,000, and the company believes it will be several months before we see figures like this again.
Technical strategist Rob Sluymer claims that bitcoin has been “badly compromised” over the past couple of weeks, writing in a newsletter:
The crypto breakdown over the past week mirrored the ‘get me out of everything’ panic that dominated all asset classes, whether they were defensive (bonds and gold) or not (equities). Lower highs and lower lows are in place for bitcoin, leaving in a compromised, potentially vulnerable longer-term profile.
The good news, according to Sluymer, is that bitcoin is presently holding above its 200-week average, which it did in both 2015 and 2018. During those years, bitcoin was encountering some of its most bearish conditions, so the fact that it’s managing to sustain its position and overcome present resistance levels is a good sign that perhaps the currency is stronger than originally thought.
Sluymer continues by saying:
For now, technically we will again give bitcoin the benefit of the doubt that it is attempting to bottom but recognize bitcoin will likely need months of consolidation to repair the technical damage now in place.
It’s hard to know right off the bat if Sluymer is correct in his analysis. Bitcoin has shown a strong turnaround in just the last 48 hours, spiking by nearly $2,000 from its recent lows. While stocks and oil continue to drudge through the doldrums, the crypto market is exhibiting signs of pure resilience. Bitcoin is already up at least 15 percent from where it stood earlier this week.
Vijay Ayyar – head of business development with cryptocurrency trading platform Luno – explains:
There was a lot of buying pressure sub-$5,000 as can be seen and clearly indicates seller exhaustion. These prices were potentially below running costs for many miners, and we’ve seen hash rates drop. Miners are also better off just buying bitcoin at such prices so there could be that aspect as well.
Further Drops Before May?
Ayyar comments that the currency could experience even further drops before its scheduled May halving. He states:
This is classic redistribution and would be very healthy for future bitcoin price action and if we were to have bullish momentum going forward.