Bitcoin Could Fall to $3.5K as Recession Strengthens and Stocks Collapse – Gareth Soloway
(Kitco News) – Bitcoin, currently trading around $20K, could plunge to as low as $3.5K, said Gareth Soloway, Chief Market Strategist at InTheMoneyStocks.com.
“The initial support is $12K-$13K,” he explained. “And then I worry about you going below $10K to $8K, and maybe at worst to $3.5K.”
He also highlighted that a recession was on the way and that the stock markets would do poorly.
“The problem is that consumers are going to run out of the money they saved by the middle of next year,” he said. “When they run out of money, and the Fed has just stepped in, it’s going to be a cliff dive for the economy.”
Soloway spoke with David Lin, anchor and producer at Kitco News, at the Future Blockchain Summit in Dubai.
Stock markets
Stock markets won’t recover for at least a decade, Soloway said, with blue chip stocks like Apple and Tesla facing more downside.
“I really think we won’t see another all-time high in the stock market for 10 years,” he said. “I have a sub-$100 price target on Apple for the next twelve months or so…all tech stocks will be affected.”
Apple is currently trading near $142 per share and has fallen 20 percent over the year. The Nasdaq has fallen by 32 percent so far this year.
Soloway suggested that consumer staples could perform well during the coming recession.
“As we enter a period where growth is harder to come by for tech stocks, you have to look toward these staples that people need,” he said. “One of my favorites is GSK [GlaxoSmithKline]. Right now, GlaxoSmithKline is busted, but it’s very profitable… so you’re looking at pharmaceuticals.”
Fed policy
Overall inflation in the US was 8.3 per cent in September. In response to high inflation, the Fed has raised interest rates by 300 basis points during the year, and more increases are expected at the meeting in November.
However, Soloway said the Fed would eventually pivot, either slowing tightening or reversing entirely.
“My [definition of a] pivot is where the Fed goes from 75bps to 50bps,” he explained. “By 2023 in the first quarter, I think they’ll be done … this is going to coincide with people running out of COVID savings.”
To find out Soloway’s stock picks and forecast for gold, watch the video above.
Follow David Lin on Twitter: @davidlin_TV
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