The Bitcoin (BTC) price can be as low as $ 13,000, warns strategist
If crypto’s past bubbles are something to go by, bitcoin may be falling much further.
That’s according to a strategist, who warns that the world’s top cryptocurrency is likely to go as low as $ 13,000 – a nearly 40% drop from today’s level.
“We will continue to sell this type of cryptocurrency into this environment,” Ian Harnett, co-founder and chief investment officer of Absolute Strategy Research, told CNBC’s “Squawk Box Europe” on Tuesday.
“It really is a liquidity game. What we have found is that it is neither a currency nor a commodity and certainly not a store of value.”
Harnett explained his bearish call, saying that previous cryptocurrencies show that bitcoin tends to fall about 80% from all-time highs. In 2018, for example, the cryptocurrency fell close to $ 3,000 after reaching a peak of almost $ 20,000 at the end of 2017.
Bitcoin rose to a record high of almost $ 69,000 at the height of the crypto madness in 2021. In 2022, it has gone in the opposite direction.
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Such a fall in 2022 “would take you back to around $ 13,000,” a “key support area” for the token, according to Harnett. Bitcoin rose to a record high of almost $ 69,000 at the height of the 2021 crypto frenzy.
“In a world where liquidity is plentiful, bitcoins in this world are doing well,” Harnett said. “When that liquidity is taken away – and that is what the central banks are doing at the moment – then you see that these markets come under extreme pressure.”
The cryptocurrency world is on the edge while investors are struggling with the impact of higher interest rates on assets that flourished in a time of extremely loose monetary policy.
Last week, the Federal Reserve raised its reference rate by 75 basis points, the largest single increase since 1994. The Fed’s decision was followed by similar measures by the Bank of England and the Swiss National Bank.
It has taken its toll on digital assets. The total value of all cryptocurrencies plunged more than $ 350 billion in the last two weeks. Bitcoin was traded at a price of 20,010 dollars on Tuesday, down 5% in the last 24 hours. Crypto No. 1 has lost more than half of its value so far this year.
The crypto market was already on shaky ground before the Fed’s rate hike last week, with traders worried about the $ 60 billion collapse of popular stablecoin terraUSD and its sister token luna.
To complicate matters further, the fall in the value of a derivative token designed to be one-to-one redeemable for ether has exacerbated economic problems at major industry players such as Celsius and Three Arrows Capital.
