Historic Patterns Show 2022 Bitcoin Crash Is Not Over Yet
Given the recent scandals of Terra Luna (the stablecoin that crashed), Celsius (the platform that crashed) and Three Arrows Capital (the crypto investment fund which could still collapse), many in the cryptoshere are now wondering whether the Bitcoin bottom has been reached and we’ll go back up from here.
According to Ian Harnett, co-founder of Absolute Strategy Research, historic research has left him to believe we’re not there just yet. Former crypto rallies and subsequent crashes have shown him that Bitcoin tends to fall some 80% from whatever it’s all time high is during that run.
Speaking to CNBC’s “Squawk Box Europe”, Ian explained that:
It really is a liquidity play. What we’ve found is it’s not a commodity.
In a world where liquidity is plentiful, the bitcoins of this world do well. When that liquidity is taken away — and that’s what the central banks are doing at the moment — then you see those markets come under extreme pressure.
With the Federal Reserve doing everything in it’s power to cool inflation, Ian believes both tech stocks and crypto will still see a further drop.
He explained how former crypto rallies have taught him that Bitcoin tends to fall roughly 80% from all-time highs. In 2018, for instance, the cryptocurrency plummeted close to $3,000 after hitting a peak of nearly $20,000 in late 2017.
80% from $69,000 would then leave us with a bottom of $13,000. Still got some way to go.
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