The current volatility in the cryptocurrency market has caused analysts to change their stance on the outlook for Bitcoin (BTC) as the asset continues to show signs of further correction. While some analysts are predicting a rally for the asset, part of the market is predicting continued bearish momentum for the flagship cryptocurrency.
In particular, Michael Purves, CEO of Tallbacken Capital Advisors, extended his bearish stance on bitcoin, noting that the asset’s long-term momentum had begun to turn shaky, he said in an interview with Bloomberg Technology on August 30.
His position is not driven by asset fundamentals, Purves said, but a decline in long-term momentum makes the next Bitcoin prediction at $15,000.
“What really made me bearish again had nothing to do with being fundamentally bearish or fundamentally bullish. Just the fact that the long-term momentum really started to come down at the end of January and this particular signal I focused on did it three times before and each time bitcoin corrected by 60-70% over the next period. four to ten months,” Purves said.
Bitcoin fails to show non-correlation with stocks
In particular, the analyst stated that bitcoin has since lost its stability, especially in terms of correlation with the stock market. A correlation began, which appeared with the arrival of institutions in the sector.
However, based on current market conditions, Purves questioned the ability of institutions to maintain their positions in bitcoin.
“It has a fairly high correlation with the NASDAQ or other large risky assets. Interesting, since it has not demonstrated the ability to be uncorrelated, I wonder if institutions will fall into it, ”he added.
While bitcoin proponents argue that the asset will rise and become a hedge against inflation, Purves suggested that the asset has not demonstrated this ability. In that line, he added that this is another reason why institutions are likely to stay away from this asset.
Institutional Interest in Bitcoin
While the analyst doubts institutions’ ability to stay in the market, various institutions see the correction as an investment opportunity.
As reported by Theinquirer, Seven Seven Six, a venture capital firm founded by Reddit co-founder Alexis Ohanian, plans to make its first direct entry into the crypto space with the goal of raising a $177.60 million fund. The company plans to take advantage of the price depression to accumulate various assets.
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Watch the full interview below: