The prices of cryptocurrencies have endured a torrid time this year and an analyst at Bloomberg is of the view that the bearish trend is not yet over.
Bitcoin price plunge set to continue
Over the past few weeks, the prices of Bitcoin and other leading cryptocurrencies underperformed even though a slight stability has been achieved over the past few days. The market selloff has however continued, with Bitcoin now trading just above the USD 3’800 mark. With the current trend, an analyst at Bloomberg is of the view that the cryptocurrency market will experience more pain this year, as he expects BTC price to drop to the USD 1’500 region before the end of the year.
Bloomberg technical analyst Mike McGlone pointed out that at the moment, Bitcoin is stuck in a stiff downward momentum and that will probably lead to a further drop in price. The technical indicator Average Directional Index (ADI) indicates that BTC is at a peak that hasn’t been seen since July. With that indicator high, it is an indication that there is a high level of downward trend vigor. McGlone predicted that the price of BTC is headed towards the USD 1’500 mark very soon. If BTC price were to reach that level, then it would signal a 60 percent drop from its current price. So far this year, BTC has lost more than 81 percent of its value after reaching a high close to the USD 20’000 mark.
McGlone stated that Bitcoin Cash hard fork and tax-based selling are the major catalysts behind this drop in price. He stated that “There’s little to prevent fading bitcoin prices from reaching the continuous mean of USD 1’500. A rush to the exits among investors seems to be in place. The hard fork was a key trigger that signaled the technology is way too nascent. You had these dicey characters threatening to destroy each other and institutions said ‘It might be best if we stay away from this for a while.’”
While talking about the negatives of the market, Bloomberg also pointed out the recent SEC crackdown on ICOs and the commission’s hesitancy to approve a bitcoin ETF as things that have affected the market. They added that the concern over lack of investor protections makes it unlikely that the agency will approve a Bitcoin exchange-traded fund anytime soon, even though it is something that Bitcoin bulls have been hoping it would happen this year.
BTC price plunged in November
Last month, the price of the leading cryptocurrency dropped by over 40 percent, with this drop signaling its largest monthly price drop in the past seven years. XRP which is now the second largest cryptocurrency also lost roughly 30 percent of its value last month.
McGlone stated that “The trend is lower prices, lower volatility, reduced speculation, and the preponderance of stable coins.” He pointed out that there is a need for cryptocurrencies to set a firm price base, however, the market hasn’t reached that base yet.
Several market experts have given their predictions regarding the Bitcoin price bottom, with most of them suggesting prices higher than the USD 1’500 McGlone predicted. Last month, Anthony Pompliano stated that “85 percent from the all-time high is about where we’ll end up. Puts it around $3,000. Came close over the weekend but probably a little bit more to fall.”