Some of the highest-profile investors in the crypto space believe a crypto market bottom is fast approaching and the time is right to buy.although one still warns of catastrophic outcomes if prices drop below established support levels.
Billionaire Mike Novogratzfounder, chairman and CEO of digital asset merchant bank Galaxy Digital Holdings, told a Morgan Stanley conference on Monday that cryptocurrencies could be close to bottoming out, with Ether (ETH) likely holding at $1,000 and bitcoin (BTC) around $20,000 to $21,000..
The fund for cryptocurrencies would realize faster than that of US stocks, which could fall 15% to 20% moresaid:
“Ethereum should stay around $1,000 and right now it is at $1,200. Bitcoin is around $20,000-21,000 and it’s at $23,000 so you’re much closer to the bottom of crypto than where I think. Stocks are going to have another 15% to 20% decline.”
Hayes warns of selling risk
Arthur Hayes, co-founder and former head of BitMEX, took a similar view, acknowledging on Twitter on Monday that heOn-chain data for Wrapped Bitcoin (wBTC) and Ether indicated that “liquidations have mostly occurred”.
However, Hayes warned that if support levels are broken for BTC and ETH at $20,000 and $1,000, respectively, we could expect “massive selling pressure in spot markets”.
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If these levels break, $20k $BTC &$1k $ETH, we can expect massive sell pressure in the spot markets as dealers hedge themselves. We can also expect that there will be some otc dealers and that they will be unable to hedge properly and might go belly up.
— Arthur Hayes (@CryptoHayes) June 14, 2022
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If these levels break out of $20,000 for BTC and $1,000 for ETH, we can expect massive selling pressure in the spot markets as traders hedge. We can also expect that there will be some otc traders and they will not be able to hedge properly and could go bust.
Pal and Scaramucci are shopping
The macro investor Raoul Pal is using the recent market crash as an opportunity to increase his cryptocurrency holdings. On Tuesday, Pal told his 956,000 Twitter followers that “we are in a buy zone” for bitcoin.adding that he was preparing to add “significantly” to his crypto holdings “probably starting next week and in July.”
The former Goldman Sachs executive explained that bitcoin’s impending bottom can also be signaled by the weekly Relative Strength Index (RSI), which is at 31, approaching its all-time low at 28.
With the weekly RSI at 31 and the lowest ever at 28, that too suggests the low is within striking distance. Don’t ever expect to nail the low however…
DeMark weekly charts suggest low is next week or in next 5 weeks. pic.twitter.com/rwtfFxjYzH
— Raoul Pal (@RaoulGMI) June 14, 2022
With weekly RSI at 31 and all-time low at 28, that also suggests the bottom is within reach. Don’t expect to ever bottom out though… DeMark’s weekly charts suggest the bottom will be next week or the next 5 weeks. pic.twitter.com/rwtfFxjYzH
The RSI is a metric used by investors to measure the speed and magnitude of price changes, which can indicate overbought or oversold conditions.. According to Investopedia, an RSI reading of 30 or below indicates an oversold and underpriced condition.
Pal said his framework typically expects 60% reductions in long-term time horizons.and added:
“In fact, the best way to optimize returns is to buy meaningfully when the market tests the key trend.”
Anthony Scaramucci, founder of Skybridge Capital, told CNBC’s Squawk Box on Monday that investors should “remain disciplined” amid cryptocurrency slump, noting their fund has continued to buy bitcoin and ether.
“With the incremental cash coming into our fund we have bought more bitcoin and Ethereum […] So yeah, truth be told, people will look back on this debacle and say I wish I had fresh cash to buy into it.”
Novogratz was less enthusiastic about investing at the moment, taking a more conservative approach and telling attendees that it may not be the time to “invest a lot of capital” just yet.since the economy may have more travel.
“Until I see the Fed faltering, until I really think the economy is that bad and the Fed is going to have to stop going higher and even think about cutting, I don’t think now is the time to really deploy much capital”.
Other metrics that could shed light on whether cryptocurrencies are near their bottom of the market is the Fear and Greed Index, which as of June 15, is currently at eight, under the “Extreme Fear”which was last seen on May 17, around the time of Terra’s collapse.
Bitcoin Fear and Greed Index is 8. Extreme Fear
Current price: $21,598 pic.twitter.com/lsbousUzeV— Bitcoin Fear and Greed Index (@BitcoinFear) June 14, 2022
Bitcoin’s fear and greed index is 8. Extreme fear
Current price: $21,598 pic.twitter.com/lsbousUzeV
Bitcoin is currently priced at $22,061 and ETH is at $1,215 at the time of writing this article.
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