Written by Crypto Guru
When we look at the most recent slide of bitcoin and other cryptocurrencies, the market appears to be only for the iron-stomached. Google ban on ads related to cryptocurrencies and the International Monetary Fund’s advise for enhanced regulation on the asset class have pulled the price of Bitcoin, Ripple and Ethereum downwards resulting in nearly $500 billion wiped out from the market cap of a basket of about 1,500 cryptocurrencies compared to the life-time high achieved in the first few weeks of January. For the purpose of comparison that loss equals the value of Warren Buffett’s Berkshire Hathway presently valued at $510 billion.
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The losses suffered by cryptocurrencies are not in relation to the peak achieved by Bitcoin in December at $20,000 in some of the exchanges. Rather, the loss is based on when the 1,500 plus cryptocurrencies that were tracked by CoinMarketCap collectively achieved their life-time high valuations. However, for the most part, the smaller cryptocurrencies, also known as altcoins have largely followed the volatility of Bitcoin and that trend has been maintained in the recent sell-off too.
As for Bitcoin, the present slide may go further south, before making a U turn and head north. In a market hit by weak sentiment, any negative headline is more likely to trigger selling. This observation was made by Thomas Lee, managing partner of Fundstrat Global Advisors, in a note on Thursday. His observation also followed Bitcoin dropping below the $8,000 mark losing about 7% in the space of 24 hours. Likewise, Ethereum too dropped below the $600 mark recording a loss of 9% while Ripple lost about 8% to 68 cents over the same period.
Where is Bitcoin headed now?
The question upper most in the minds of many who have invested in cryptocurrencies is how far down would Bitcoin go now before making a U turn and move on the upward trajectory. According to Fundstrat, some quick calculations reveal that Bitcoin can potentially shed another about $37 billion in the foreseeable future and hit a market cap of about $99 billion. The calculations by Fundstrat is based on technical analysis by Robert Sluymer, the technical strageist at Fundstrat. He opines that Bitcoin will evidence bottoming in the short-term when the price gets closer to $5,873.