Following the difficult six months flagship digital asset bitcoin has had into the year, some analysts have said the market has found the bottom and cryptocurrencies should rally from here.
However, going by a Bloomberg survey which was conducted yesterday, that is not looking likely. The result of the survey indicates that the market is moving towards more gloom and doom.
If the survey respondents are right, Bitcoin is on track to record another drop of around 43%. Recall that on June 18, the flagship cryptocurrency plunged to $17,622, the lowest level since December 2020.
The survey report
Bloomberg MLIV Pulse asked nearly 1,000 investors (Wall Street investors) their views on the future valuation of Bitcoin in the survey.
The majority revealed that they were not expecting any significant recovery for bitcoin. Note that the digital asset is currently trading a little above $20,000 but these investors believe that it will likely crash further.
Sixty percent of the 950 investors believe BTC may be hitting the $10,000 price point soon, while 40% see it rallying to the $30,000 mark.
Glassnode data counter-argues
In contrast to the results of the MLIV Pulse polls, historical data from Glassnode, an on-chain market intelligence, suggests a possible price bounce for Bitcoin.
According to Glassnode, the net unrealised profit and loss position of short-term Bitcoin holders has reached levels that historically have marked BTC macro bottoms, which is usually followed by a price surge.
When looking at BTC’s historical data, this situation could be a good thing as it has led to bounces in price in the past. It is now on the cards if history will, for the 4th time, repeat itself.
Also, former emerging markets investor at Morgan Stanley (MS), Ruchir Sharma has predicted that bitcoin could experience a comeback similar to that of Amazon.
Recall that Amazon’s value fell by about 90% during the early 2000s dot-com collapse but increased by more than 300 times over.
He, however, noted that:
“I’m not willing to call the [market] bottom as of yet on bitcoin and cryptocurrencies. The U.S. bear market regime, which is the driver of risk appetite around the world, is still very much in play.”
Is Bitcoin at $10,000 going to happen?
The MLIV pulse is an indicator of how bearish sentiments and investors have become in the market.
Jared Madfes, a partner at Tribe Capital, a venture capital firm, speaking to Bloomberg said, “It’s very easy to be fearful right now, not only in crypto but generally in the world.” He added that the expectations for a further drop in BTC reflect “people’s inherent fear in the market.”
The global chief investment officer at Guggenheim Partners, Scott Minerd shares the same opinion. Minerd previously predicted that bitcoin would hit $8,000 before a market bottom is found.
Looking at the dynamics of previous bitcoin bear markets, it is not surprising to see that the majority of investors actually expect the price of the digital asset to fall to $10,000 before it makes any major recovery.
Data shows that bitcoin has consistently lost more than 80% of its all-time high value in every bear market since its inception. So if that trend is followed, the predicted $10,000 level is very much feasible.
Nevertheless, it will be interesting to note that bitcoin’s movement cannot be fully predicted. It has deviated from norms from time to time. A fresh instance is the numerous bull runs in late 2020 to 2021, which was unprecedented in history.
Bitcoin is now stuck between following or deviating from the norm of losing 80% of its all-time-high in a bear market.
In that light, bitcoin’s ability to hold current levels will likely determine its next direction, as relief on the global markets would provide a chance for crypto to recoup some of the losses from the recent months.
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