Analyst says Bitcoin correction towards $10k still on the table despite minor gains
Gareth Soloway, the chief market strategist at InTheMoneyStocks.com, has maintained that Bitcoin is in line for further correction below $20,000 despite showing signs of recovering above the level.
Speaking during an interview with Kitco News, Soloway affirmed that the next likely downside price target for Bitcoin will be $12,000, but there is a possibility of correcting further to $10,000 based on historical trends.
According to the strategist, Bitcoin’s previous trajectory towards the all-time value can also be reflected on the downside. He noted that the current environment of high inflation and interest rate hikes makes the cryptocurrency’s downside projection challenging.
“It’s important to recognise that it is very possible we go below $10,000 <…>You would prefer not to see the lows from 2018 and 2019 taken out, which were around $3,500. Aside from that, this new unprecedented environment for crypto, because of the Fed and what they’re doing, and they’re pulling out money and sucking it out of the system, you have to expect that it could be a very rocky ride,” he said.
Bitcoin’s new bottom
Soloway noted that if Bitcoin maintains its price above $20,000, the level will attract more bulls which will push it towards another all-time high. According to the strategist, sustaining the price above $20,000 will likely offer a general market sentiment of Bitcoin’s new bottom.
However, he dismissed the notion that Bitcoin might go back to zero stressing that the long-term prospects are in favour of the token, noting that the next six months will be challenging.
On the possibility of hitting $65,000, Soloway projected that it might take Bitcoin at least two years after months of sideways trading. He stated that if inflation cools down, the Federal Reserve will likely print more money in return, favouring Bitcoin.
“If the economy is suffering, if you have this systemic bear market for a longer period, that’s bad for stocks, but Bitcoin, because the printing presses will start up again that would ultimately be a bullish scenario for Bitcoin,” said Soloway.
The road towards $100,000
The strategist maintained that Bitcoin would shoot past $100,000, but the market needs to flush out assets with no utility.
However, he cautioned that Bitcoin should be treated as a new asset that is still maturing; hence investors should expect erratic price movement.
Notably, after trading below $20,000, Bitcoin has made minor gains of above 4%, trading at $21,400 by press time.
Watch the full interview below:
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