Wall Street veteran M. Purves turns bearish on Bitcoin over waning long-term momentum
The ongoing volatility in the crypto market has pushed analysts to change their stance on the outlook for Bitcoin (BTC) as the asset continues to show signs of further correction. Although some analysts forecast the asset to rise, a section of the market predicts continued bearish momentum for the flagship cryptocurrency.
In particular, Michael Purves, CEO of Tallbacken Capital Advisors, has expanded his bearish stance on Bitcoin, noting that the asset’s long-term momentum has begun to falter, he said during an interview with Bloomberg technology on 30 August.
According to Purves, his stance is not guided by the asset’s fundamentals, but the waning long-term momentum puts Bitcoin’s next forecast at $15,000.
“What really made me bearish was really, again, nothing to do with a fundamentally bearish view or a fundamentally bullish view. It was simply the fact that long-term momentum really started to break in at the end of January, and this one signal that I was focused on, it had done this three times before, and each time Bitcoin corrected 60% to 70% above the next, anywhere from four to a sort of ten month period,” Purves said.
Bitcoin’s inability to show uncorrelation with stocks
In particular, the analyst stated that Bitcoin has since lost its stability, especially with its correlation to the stock market. He started the correlation that emerged with the institutions’ entry into the sector.
However, based on the current market conditions, Purves questioned the ability of institutions to maintain their position in Bitcoin.
“It shares a reasonably high correlation with the NASDAQ or the other broad risk assets. I question, since it hasn’t shown his ability to be uncorrelated, I question whether institutions are coming in,” he added.
With Bitcoin proponents arguing that the asset will grow to become a hedge against inflation, Purves suggested that the asset has not demonstrated this ability. In this line, he added that there is another reason why institutions are likely to stay away from the asset.
Institutional interest in Bitcoin
Despite the fact that the analyst questions the institutions’ ability to remain in the market, various entities see the correction as an opportunity to invest.
As reported by Finbold, Venture Capital (VC) firm Seven Seven Six, founded by Reddit co-founder Alexis Ohanian, plans to make its first direct entry into the crypto space, aiming to raise a $177.6 million fund. The firm plans to take advantage of depressed prices to accumulate various assets.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
Watch the full interview below:
