Best worst case scenario for bitcoin and crypto markets
Best worst case scenario for bitcoin and crypto markets.
Prominent analysts are offering views on Bitcoin’s future price action after the market’s recent decline.
Analyst Benjamin Cowen assesses where Bitcoin is in the first half of Q1 2022 and when investors can expect altcoins to rally.
In a new strategy session, Cowen to speak that while he’s not particularly bullish on bitcoin in the short-term, he limits his analysis to Q1 and doesn’t cover the rest of the year.
“My overall outlook for Q1 is bearish or at best neutral on Bitcoin. The best scenario I can think of would be for Bitcoin to close Q1 where it opened, at around $46,000.
I’m not talking about Q3 or Q2 or Q4, I’m talking about Q1.”
Cowen explains how he manages risk in an environment where multiple macroeconomic factors are heavily impacting the crypto market, including the altcoin market.
“I see quantitative tightening, more macro uncertainty, dollar remains above its own bull market support band.
We see Bitcoin below the bull market support band. I can’t look at these conditions and say that this is the best case scenario for altcoins. And I’m not saying this to make you feel bad, but I’m just being honest that it is.
Currently altcoins are vulnerable as Bitcoin is below the bull market support band likely due to all this economic uncertainty as well as the Nasdaq and the stock market. The S&P recently sold off.”
Cowen went on to explain what he believes is the ideal situation for BTC-correlated altcoins.
“Altcoins perform best when Bitcoin moves sideways above a bull market support band, like in May and September 2020 or early 2021 or late 2021.”
Source: Benjamin Cowen
The chartist concludes his analysis by discussing whether there will be a alt-season in the coming months. Cowen mentioned that many altcoins failed to recover with Bitcoin’s recent $10,000 rally.
“If bitcoin falls another 10% or 20%, altcoin valuations against the US dollar will likely revisit previous lows when bitcoin was $33,000.
The important reason to think about this is that if you are looking to invest capital in crypto, you should consider the potential scenario of Bitcoin staying below its bull market support band.
If that’s the case, altseason is unlikely to be seen right away.
Cowen went on to discuss whether BTC will hit a best-case scenario and break a bull market support band.
“If that happens, you still have plenty of time to buy altcoins when the market is less vulnerable.”
DataDash moderator Nicholas Merten, to speak that the news is not the sole cause of Bitcoin’s recent downturn.
“What is pulling the bitcoin price down here compared to the market? First of all, let’s go ahead and accept that although there are some new reasons…
It’s the people who sell bitcoin in the market. It’s not always news, events… It could be people taking short term trades or whales playing through their strategy and pushing the price up one way or another.”
The source: Nicholas Merten
After that, Merten said, the bitcoin price could fall back even further, possibly 25% more from current levels in the worst case.
“We really have an opportunity here and I would say more than I think most people will if the price goes into the $30,000 range and that might be the wrong way to go. I think it’s a worst case scenario for crypto as BTC returns to this consolidation range like it did in June 2021 despite the recent price breakout to the upside.”
Even if BTC falls to $30,000, Merten insists investors shouldn’t panic and sell assets.
“I’ll go ahead and clarify if BTC breaks into the $30,000 range or the $30,000-35,000 range… Or if I’m wrong and the price still breaks out leading to an upcoming rally in the market – never mind as it turns out, this is no reason to abandon and sell all your cryptocurrencies. I think that’s what people think about all the time. It has crossed the minds of many people because there hasn’t been a surge like this before.
I think we have a little mistake. Players benefited greatly from the January 2021 rally that lasted through March and April when DOGE flew “to the moon” and every coin rallied. The process was fun, epic and amazing, nothing wrong with that, crypto was in the spotlight at the time. And now everyone is worried about the Fed decision, the geopolitical conflicts and the stock market retracement…
Everyone can give you different opinions, but one of the best things you can do is analyze history when it comes to cryptocurrencies and see whether or not we are in a typical bearish range, it’s time to look for more weakness or do we have them a potential buying opportunity. Or we are in a waiting period.
There are 3 different mentalities: buy, sell and sometimes just hodl. Wait. Do nothing. Don’t panic, whether it’s panic buying or selling, and definitely don’t trade with leverage or do stupid things when the market is this unstable. Sometimes it’s best to persevere, give him some time, and most importantly, set a goal to calm down.”
Regardless of whether BTC continues to fall or not, the DataDash host emphasized that the overall trend is still bullish.
“My main point to share with you is to follow the general chart here. I believe sometime in April and May, BTC could start repeating all-time highs. It is possible that the price is still moving sideways a bit and trying to rise in the short-term.
But again, when we talk about the idea of a possible outbreak, let’s focus on the next few weeks and months. We believe Bitcoin will have a bullish starting setup. However, it may take longer than expected.”
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