Source: Adobe/THANANITFollowing heavy selling during the Asian trading session today, bitcoin (BTC), ethereum (ETH) and other major cryptocurrencies trimmed some of their losses later in the day, with some coins seeing strong 24-hour gains and others slight losses at press time.
At 10:18 UTC, BTC traded at USD 42,524, down by 0.7% for the past 24 hours. At the same time, ETH traded at USD 3,260, down by 2.2% over the same time period.
In terms of other notable movers in the crypto market, the smart contract protocol Cosmos’ native token ATOM rose by an impressive 21% to USD 43.47, coming in as the day’s strongest performer among the top 100 coins. Meanwhile, the popular crypto game’s coin decentraland (MANA) rose by 14.6% to USD 3.26.
The mixed market action today follows an extended period of selling in the crypto market, with bitcoin earlier today hitting a low of USD 41,000 – its lowest level since a consolidation period that ended on September 29.
Commenting on the next price levels to keep an eye on, prominent crypto bull and CEO of Galaxy Digital, Mike Novogratz, said that USD 38,000 could be “a floor” for bitcoin.
“I know big institutions who are going through their process to put positions on […] I think they are going to see those as attractive levels to buy,” Novogratz said to CNBC on Thursday. “On the charts, 38-40 [thousand] feels like where we should bottom,” the large crypto investor added.
And while some are arguing that chart technicals could save the day, others warn about macroeconomic headwinds, saying bitcoin is now trading in a similar way as other mainstream risk assets.
Commenting on the latest market action in a recent blog post, former BitMEX CEO Arthur Hayes said:
“If I believe that Bitcoin could trade below [USD] 30,000 and Ether below [USD] 2,000 in a three-to-six month time horizon, I will dump all of my shitcoins. That is because Bitcoin and Ether are the highest quality coins, and they will decline less than all their yet-to-be-proven competitors,” Hayes wrote, while adding: “These shitcoins could go down 75% to 90% in a true crypto risk-off environment.”
The comment from Hayes was also picked up by Nik Bhatia, author of the popular bitcoin book Layered Money, who wrote in his own summary of the blog post that he “generally agreed” with Hayes’ take.
However, he also added that bitcoin investors need to learn that the asset “no longer exists in a bubble,” and that there is a “misplaced optimism” in bitcoin that the asset is driven only by network growth, and not economic fundamentals.
“Bitcoin evangelists have been too successful over the past several years in spreading the gospel of decentralized money, that bitcoin has become just another mainstream market,” Bhatia wrote.
Speaking from an on-chain perspective, however, some analysts were still optimistic about bitcoin simply being in a correction phase of a longer-term bull market.
“Looking at the models I have on BTC, they suggest a double pump bull market, else the models will break at the current rate of price climb,” the popular on-chain analyst Willy Woo wrote on Twitter Thursday, while noting that such “double pumps” happened multiple times in the past:
BTC double pumped in 2013; a huge capital inflow.
ETH double pumped in 2017; also a huge capital inflow.
BTC 2021 is facing institutional inflows.
Double pump seems like what happens when large inflows are injected into a smallish asset.
— Willy Woo (@woonomic) January 6, 2021 ____