Despite a sharp decline over the weekend, Bitcoin supporters remain optimistic about the cryptocurrency’s future. Bitcoin (BTC-USD) dropped below $50,000, a level last seen in February, before recovering approximately $6,000. This leaves the cryptocurrency down 14% for the week, following its most significant drop since the FTX collapse.
Bitcoin proponents are undeterred and foresee the digital currency surpassing $100,000 by the end of 2024. Bitcoin’s all-time high, set last March, stands at $74,000. According to Martin Leinweber, director of digital asset research at MarketVector, if Bitcoin can reclaim the $72,000 mark, it’s feasible to expect it to reach between $80,000 and $100,000.
Mark Connors, head of macro strategy at Onramp Bitcoin, continues to predict that Bitcoin will hit $110,000 in 2024, a forecast he made earlier this year. Bitwise Asset Management’s CIO, Matt Hougan, also anticipates new all-time highs following the recent market pullback.
Hougan notes that Bitcoin investors tend to be long-term holders, not quick to sell during downturns. This resilience supports the optimistic outlook for Bitcoin’s future.
However, some skepticism remains regarding Bitcoin’s performance. Critics question whether Bitcoin is truly a safe haven or an uncorrelated asset, particularly given its recent correlation with technology stocks. Leinweber emphasizes that Bitcoin remains a risk asset, lacking the track record and institutional endorsement that gold has. Additionally, Bitcoin’s 24/7 trading nature often makes it the first asset to be sold during broader market sell-offs.
The recent decline in Bitcoin’s price appears to be linked to the strengthening of the US dollar against the Japanese yen. With leveraged positions unwinding, attention is turning to Bitcoin exchange-traded funds (ETFs) managed by major Wall Street firms. Preliminary estimates from JPMorgan show that US Bitcoin ETFs experienced net outflows of $168 million on Monday, with trading volumes exceeding $5.2 billion, double the previous day’s volume.
Leinweber believes the market will now favor cautious investors over traders. Fundstrat Global Advisors maintains its prediction that Bitcoin will reach $126,000 in 2024, viewing the recent decline as a minor correction rather than the peak of the market.
Mark Newton, head of technical strategy at Fundstrat, describes the recent decline as “just a drop in the bucket,” reinforcing the belief in Bitcoin’s strong long-term potential.