There is enough conversation about Bitcoin being in a “supercycle” doing the rounds in crypto circles. Therefore, despite the recent steep correction, analysts see those gaps closing by year-end. So much so that the anticipation goes beyond the $100k mark that was pegged earlier.
However, Into The Cryptoverse CEO Benjamin Cowen, in a recent interview with Blockworks, expressed nervousness about those price levels. He said,
“Is a trend sustainable if we go up to $150k next month? I don’t think so. “
He explained that a lot of selling pressure, including from the analyst himself, would bring down the market. However, he also added,
“I ultimately do think Bitcoin will hit a million dollars. It’s not going to do it this cycle.”
Explaining further, Cowen recalled that the history of price movements indicates that anytime the market gets that far extended, it goes down as well for a while. On that note, he said,
“If it goes to $150k, in say the next 30 days, we’re basically going to be looking at an extension from the 20-week moving average of over 100%. And that’s basically where we were at the local top in April and May, where we are so far extended.”
Essentially explaining that no new demand will be able to offset the selling pressure that Bitcoin will experience on the back of a quick extension.
With that, according to analyst PlanB, Bitcoin is still on the way to $100k after missing its November trajectory of $98k.
However, a lot might change in the upcoming months as to how Bitcoin cycles are predicted. As per Cowen,
“I think that over time, the crypto space, at least for Bitcoin specifically, the cycles will become harder and harder to discern from one another.”
Moreover, he sees Bitcoin becoming more integrated with the traditional markets over time. In another interview, Avil Felman of BlockTower had also resonated with the thought, stating that institutional funds look at Bitcoin to risk-off when their balance sheet starts going south. Thereby, changing the correlation with BTC and other asset classes.
In a recent analysis by Ecoinometrics, the analyst also concluded,
“If Bitcoin becomes more tame it is likely we’ll see a growing overlap between investors holding traditional tech stocks and the ones holding BTC. That might increase the correlation score between those assets.”
Also, we know that top analysts, including Cowen, expect the volatility of Bitcoin to go down as the market matures. Cowen stated that he doesn’t expect to see a 90% drop in Bitcoin’s value anytime soon. On the other hand, it needs more support for a rally. In this regard, Cowen said,
“I think that in order for Bitcoin to get to $100k, we needed institutional money.”
The support that BTC is anyway steadily accumulating. As per CoinShares’ weekly inflows, Bitcoin recently recorded the largest inflows in the last five weeks. On the back of ETP launches, the inflows totaled US$247 million in the said period.
