28.11.2021

Guggenheim Claims Bitcoin Could Drop To $ 20K

We have clarified the latest data: today, Bitcoin looks unconvincing. The rate of the first cryptocurrency is $ 54,313, which is 2.5 percent less than a day ago.

Over the past week, the rate has decreased by 13.5 percent, while on a monthly basis, the value of the asset has remained practically unchanged. The annual return on BTC is 693 percent.

Bitcoin has been pleasing investors with huge returns for several months in a row. Since October last year, there has not been a single red candle on the 1-month chart of the cryptocurrency, that is, at the end of each month, the first blockchain coin brought income to its investors. However, such a “holiday” may not last long, says Scott Meinerd, chief investment officer of Guggenheim. In his recent interview on CNBC, he said that in the foreseeable future, the value of BTC could collapse up to $ 20,000. This point of view sounds too radical, so they did not agree with it.

The Bitcoin price chart for the last three months looks like this.

Bitcoin price chart for three months

The cryptocurrency situation is aggravated by record fees that must be paid for transferring BTC. For example, yesterday the indicator exceeded the equivalent of $ 62 for the first time, which is too high a price for small investors. This means that it is now possible to trade bitcoins without any problems except on centralized exchanges.

Against the background of the lack of large-scale growth, some analysts undertook to predict an even greater collapse of the cryptocurrency. Note that critical points of view are always voiced – and they do not have to come true. Therefore, Scott Meinerd’s comments should be treated only as another opinion. This is not a financial recommendation, and it is definitely not worth making decisions solely from the point of view of one analyst.

What will happen to Bitcoin?

Since about the beginning of March, the main cryptocurrency has not been able to gain a foothold above the 60 thousand dollar line. Now it is trading in the zone of 54 thousand dollars, but Minerd is confident that this boundary will not be held by the bulls for too long. Here’s a quote from Cointelegraph.

Considering the large-scale trend that has occurred in Bitcoin in the short term, this looks very suspicious. I think we still have to go through a major correction in the crypto market.

Minerd is not a critic of cryptocurrency – on the contrary, he still believes that the long-term goal for its growth is in the region of $ 400,000. The fall he predicts is just another bullish trend correction. The analyst continues.

I think we could go back to $ 20-30K for BTC, which would be a 50 percent drop. Interestingly, we have seen similar collapses before.

Many supporters of the main cryptocurrency disagree with his opinion. For example, Bitcoin aficionado Anthony Pompliano stated that the average correction of BTC in the previous growth cycle lasted for about 16 days, while only a week has passed since the recent collapse of the Bitcoin price. That is, in such a short period of time, the bears will not be able to push the price of an asset up to $ 20,000. In addition, previously there were no collapses in the value of the first cryptocurrency twice as part of the usual correction.

The only exceptions were global large-scale events like the March collapse of markets in 2020 amid fears due to the spread of the coronavirus. Then Bitcoin dropped from $ 8 to $ 4,000 in just a few days. And this was not an ordinary drawdown at the stage of market growth, but an unexpected incident. This is usually called the “black swan”.

We believe that the collapse of the Bitcoin exchange rate two to three times from the current level is too loud a statement. As we have already noted, the correction of the BTC rate at the stage of global market growth is usually 25-30 percent, but a drawdown even twice will mean the end of the bullish trend. And since Minerd is still counting on the long-term goal of the cryptocurrency in the region of $ 400,000, his statement sounds even weirder.

It is possible that such a “frightening” forecast was made solely to attract attention. While the general trend in the market is still upward, it is definitely not worth getting upset over the point of view of one person.

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