Bitcoin Seen Sink To $10K, This Asset Management Predicts
Bitcoin returned to the bottom of its current range and may see further downside pressure in the coming days. The cryptocurrency is still recovering from the collapse of FTX, the former second largest crypto exchange in the world, and the contagion that was unleashed in the sector.
As of this writing, Bitcoin has seen an increase in selling pressure. The cryptocurrency is trading at $16,200 with a loss of 2% in the last 24 hours. Other assets in the crypto top 10 are registering similar price action, but the majority are preserving gains from last week.
Bitcoin could crash to its 2020 levels amid FTX’s collapse
A report from Bloomberg claims that some institutional investors are bearish on Bitcoin. Mark Mobius, veteran fund manager and founder of Mobius Capital, believes Bitcoin could fall to $10,000 in the medium term.
The fund manager claims that the crypto industry could suffer from more contagion. Since the crypto exchange filed for bankruptcy, several companies ceased operations. Digital Currency Group (DCG) company Genesis is a case in point.
The company stopped accepting withdrawal requests from its customers and is rushing to raise capital to prevent bankruptcy. The situation has caused many to speculate on the solvency of DCG. The rumors contribute to the uncertainty in the crypto market.
In this context, the price of Bitcoin and other assets is trending sideways. BTC is likely to follow this trend in the coming weeks. Mobius classified the current environment as “too dangerous” to invest any of its clients’ money.
Despite the current market conditions and FTX’s collapse, the fund manager believes that crypto will have a permanent role in global finance, suggesting a long-term bullish bias:
But crypto is here to stay as there are more investors who still have faith in it. It’s amazing how Bitcoin prices have held up.
Bitcoin Options Players Expect Doom for December
Additional data provided by Bloomberg, based on options platform Deribit, indicates significant open interest leaning towards the sell side (puts) for December. By the end of 2022, many investors expect Bitcoin to gravitate around $10,000.
However, this data can also be interpreted as many investors hedging their spot-long positions. Investors buy Bitcoin on exchanges, and to protect against potential downside pressure, they buy put contracts.
NewsBTC reported that many investors are targeting Bitcoin at $30,000 by the end of the year. In that sense, the price of Bitcoin can trend higher or lower without affecting these investors’ portfolios. As shown below, the maximum pain award is $20,000; this price could most likely be the December target.
