Bitcoin is critically close to losing the trust of investors and it will lead to an even deeper drop in the market due to the fact that investors will withdraw their money from the market. This is the opinion of Chris Byuchemp, the analyst of the online trading platform IG. In conversation with Financial Times he said that the leading cryptocurrency is close to the “moment of surrender”, when the critical amount of investors will leave the market so that starting the cycle of rate drop and the drop in new sales which is unpleasant for currency holders.
Last week after bitcoin rate reached $4,000, CEO Genesis Trading Michael Moro said that cryptocurrency was moving to the “bottom” at $3,000. In his opinion this happens because bitcoin is sold by the people, who bought it before the jump in 2017.
According to Moro they began to liquidate their bitcoin savings either to get at least some income, or to reduce losses in case bitcoin rate will dive even lower.
Byuchemp is practically of the same opinion – in his view, despite most investors were happy to have their bitcoin portfolio when the rate was about $6,000, they are much less pleased to have it when the rate has dropped to $4,000 and lower. Byuchemp added that during last week in IG there is a 20 percent increase in bitcoin short positions.
The founder of Moprgan Creek Capital Anthony Pompliano earlier expressed a similar point of view concerning the nearest future of bitcoin, saying that its rate will drop by 85% comparing to the record figure after investors give up and leave the market. However, unlike Byuchemp, he intends to keep bitcoin long and believes that in the future the first cryptocurrency will show significant growth.
The alternative point of view is also shared by the market analyst Peter Brendt, who recently said that while ordinary traders and newcomers try to leave the market, “powerful hands”, aimed at a long-term game, benefit from the fallen rate since they can buy more bitcoins.