Bitcoin bulls predict new record highs following worst rout since FTX collapse

Bitcoin (BTC-USD) supporters are doubling down on their predictions of new all-time highs for the world’s largest cryptocurrency, following a slide that sent the digital asset down as much as 20% between Sunday and Monday.

Bitcoin’s price, which fell below $50,000 over the weekend in a decline not seen since February, has regained around $6,000, losing 14% in the last seven days.

As the dust settles on the worst week for bitcoin since the crash of cryptocurrency exchange FTX in 2022, bulls said they expect another leg of a rally that could take the cryptocurrency above $100,000 by the end of 2024. It set a new all-time high of $74,000 last March.

Martin Leinweber, director of digital asset research at MarketVector, told Yahoo Finance that the possibility of reaching new record highs in 2024 is “still valid.”

“If we can get back to the old highs around $72,000, I don’t think it’s realistic for Bitcoin to be trading between $80,000 and $100,000.”

Another bull – Mark Connors, head of Bitcoin macro strategy at Onramp – said on Tuesday that his March prediction that Bitcoin would hit $110,000 in 2024 remains unchanged.

Bitwise Asset Management CIO Matt Hougan also predicted that new record highs would be reached later this year, following the pullback earlier this week.

“We see Bitcoin investors as long-term investors,” Hougan told Yahoo Finance on Monday. “They are not folding paper hands.”

Amid all this optimism, some questions are also being raised again about whether the largest cryptocurrency is performing as its supporters praise it to be.

On Monday, skeptics began ringing the alarm bells about whether bitcoin was actually a safe haven or an irrelevant asset, a refrain repeated by its supporters and even BlackRock CEO Larry Fink.

BlackRock CEO Larry Fink. REUTERS/David ‘Dee’ Delgado (REUTERS / Reuters)

Such a correction, which would occur in exaggerated concert with technology stocks, seems likely to prove the opposite.

“Bitcoin is still a risk asset,” Leinweber said. “It’s not the same kind of store of value as gold. It’s still a smaller cousin because it doesn’t have the track record and it doesn’t have the institutional purchasing power.”

Leinweber and others also noted that because Bitcoin is traded 24/7, it is often sold first during market declines.

Bitcoin’s price declines over the past week are thought to be related to the decrease in cross-market transactions due to the relative strength of the US dollar against the Japanese yen.

With such leveraged bets out of the picture, many firms said they would pay closer attention to the flows of inflows and outflows into a series of new Bitcoin exchange-traded funds overseen by major Wall Street fund managers.

The story continues

According to preliminary estimates from JPMorgan, there was a net outflow of $168 million in Bitcoin ETFs in the United States on Monday, while volumes more than doubled from the previous day, exceeding $5.2 billion.

“Investors will be more careful now because they have burned their fingers, so the market will be more of an investor market from now on,” said Marketvector’s Leinweber.

The digital asset group Fundstrat Global Advisors said in a note on Monday that it maintains its forecast for Bitcoin to reach $126,000 in 2024 and does not view the recent decline as a “high” for the cryptocurrency market.

Bitcoin’s recent double-digit decline is “just a drop in the ocean,” Mark Newton, Head of Technical Strategy at Fundstrat Global Advisors, told Yahoo Finance.

David Hollerith is a senior reporter at Yahoo Finance, covering banking, cryptocurrency, and other areas of finance.

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