Bitcoin can easily drop by 25-30% next year and here’s why …


After updating historical highs above $ 24,200, the bitcoin rate fell sharply on Monday, dropping at the moment to $ 22,000.

The first cryptocurrency fell along with the decline in traditional assets amid news of the spread of a new strain of coronavirus in the UK.

Meanwhile, Miller Tabak strategist Matt Maley expects Bitcoin to drop 25-30% next year.

“The problem is that on the weekly chart, the Relative Strength Index (RSI) approached the 90 level that we saw twice in 2017, and from it Bitcoin was down 36% and 64%. People should be more careful in the new year: BTC can easily drop by 25-30%, ”Malei said.

Since 2016, BTC has experienced ten drops of 20-30%. Seven times the coin fell in price by 30-40%. Four times, bitcoin fell in price by 48% or more, coinspot writes. Investors should remember that they are dealing with a very volatile instrument, the strategist emphasized.

JPMorgan believes that the weakening inflow to Grayscale funds will serve as a negative signal for Bitcoin.

Investors invest in Grayscale’s Bitcoin trust on average about $ 1 billion per month. Since the end of last year, the volume of assets under his management has grown from $ 2 billion to $ 13.1 billion, while the price of the cryptocurrency has tripled.

The bitcoin market has not yet been overbought, and investor investment in the Grayscale trust is “too large to allow traders to liquidate positions on impulse and create a sustained negative momentum,” JPMorgan said.

However, if such inflows diminish, Bitcoin risks undergoing a correction similar to the one it faced in the second half of 2019.

“Crypto market participants are waiting for a correction after such an impressive growth. That is why a decline down to $ 20-21K is unlikely to cause panic in the market. In addition, there is a high likelihood of Bitcoin’s transition to the consolidation stage, ”the FxPro analyst team notes.

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