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Bitcoin Price Recovery Still at Risk as $4,000 Is Still Unconquered

November 26, 2018 at 19:41 by Arathur Stephen

After Bitcoin’s (BTC) days of relative stability at $4,300 level, a fresh wave of selling pressure reemerged on Saturday and washed over crypto investors worldwide, sending the flagship cryptocurrency below its purported support levels at $4,000 and $3,800.

The price drop, which came along with an influx of trading volume, came seemingly unanswered initially. Bitcoin’s market capitalization shriveled to a mere $62 billion, while altcoins experienced a sharp sell-off, sending this industry’s valued assets off metaphorical cliffs.

BTC Will Bottom at 85% Discount to All-Time High: Says Anthony Pompliano

Crypto expert, Anthony Pompliano, who works in Morgan Creek’s Digital Assets division, has told CNBC’s Squawk Box on Monday that he believes the price of Bitcoin is going to bottom out with an 85% reduction in value from its previous all-time high. Pompliano stated that his prediction is based on previous experience in the crypto markets The expert has been quoted as saying:

85% from the all-time high is about where we’ll end up. Puts it around $3,000. Came close over the weekend but probably a little bit more to fall.

The crypto expert further explained to the host, who spoke of diminished confidence among Bitcoin investors and the possibility of them returning to the crypto market following their recent sharp decline, that he feels the number one digital coin was overvalued and is currently experiencing a healthy correction.

Bitcoin was overvalued in December ‘17. There’s more sellers than buyers this year. So the price goes down. But there’s three things you gotta remember. The first is, this is a transaction settlement layer. It’s the most secure in the world. It’s got to be worth something. It can’t be worth zero.

Why Is Bitcoin Bubble Different from the Tulip Mania?

When asked by another commentator about what made the Bitcoin bubble different from the tulip mania which was a period during the Dutch Golden Age that crashed dramatically back in February 1637, Pompliano replied:

I think what’s important to remember is that through 2017, all of the buyers were retail, right? And so now what you’re seeing in 2018 as the price has gone down, you’re starting to see institutions come in. And one of the things that doesn’t get talked about much is that most of these institutions are not buying on exchanges. They’re actually buying on the OTC market, which we don’t have great transparency into or insight. So what I think you’re seeing is the washout of these retail investors”

Unlike tulips, Bitcoin has a lot more money than the tulip bubble ever could have generated — even a crashed market would likely outsize the estimated size of the tulip market at that time.

Bitcoin Isn’t Dead

While speaking to CNN last Friday, Pompliano stated that BTC’s current price $3654.56, didn’t significantly alter the historical outlook. He said that the number one digital coin and indeed the market as a whole has been experiencing a sharp price decline.

Pompliano believes that “Bitcoin isn’t dead” and the ongoing situation for him is hardly anything more than BTC’s usual bear cycle which has occurred severally in times past. However, the Multicoin Capital co-founder explained that the current bearish trend could see the top-ranked coin drop to $3,500 or even $3,000.

Mati Greenspan of eToro has also shared the same sentiments with Pompliano in a Sunday tweet, identifying $3,500 and $3,000 as the next critical support levels for the cryptocurrency.

While bullish sentiments remain among many a commentator in the crypto industry, the market continues to slide. On Monday, BTC dropped below $4,000 to reach its lowest price since September 2017.

Bitcoin is now down by more than 80% from its December 2017 all-time high. But the question that remains in the minds of traders is; how low can BTC go before bottoming out? Elsewhere in the market, the story is not so different from other cryptocurrencies experiencing massive price decline.

At press time, Bitcoin total market capitalization now stands at $64 billion which means an over 90% decline since the start of the year.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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