A cryptocurrency analyst warns short sellers of a possible 40% Bitcoin price correction prior to a long-term ascent to $150,000.
The largest cryptocurrency, Bitcoin (BTC), has recently rallied above the $52,000 mark. It has engendered a favorable outlook by augmenting optimism regarding the ascent of Bitcoin to $100,000. Conversely, analysts have projected a long-term target of $150,000; nevertheless, a potential 40% correction in the Bitcoin price is anticipated before that point.
An Analyst’s Assessment Of The 40% Bitcoin Price Correction
Prominent authority on cryptocurrencies, Michaël van de Poppe, has issued audacious forecasts concerning the trajectory of the Bitcoin price. Before a substantial decline, van de Poppe anticipates a surge to $150,000. Poppe underscored the potential for a 40% correction in the Bitcoin price prior to its subsequent ascent in a recent analysis.
Poppe posits that market sentiment frequently surpasses actuality, precipitating inflated price fluctuations. He declared, Sentiment is always a wrong indicator. Emotions always exceed reality and sentiment overshoots the price action by a mile, that’s why people start to lose money.”
The manifestation of sentiment-driven volatility in recent market trends has been apparent in the substantial increase of Bitcoin to $50,000 and the subsequent rectifications.
Furthermore, Poppe advised investors and speculators to formulate a strategic plan based on their investment horizon and risk tolerance. He advised short-term investors to exercise caution, particularly in rapid price appreciation situations. “If your horizon is relatively short, then it might not be +EV to buy an asset that appreciated 35% in 10 days,” he stated. Moreover, he emphasized the significance of conducting risk-reward analyses before trading.
The Bitcoin price is expected to retrace its steps following its apogee between $53,000 and $58,000. On the contrary, Poppe posited that delaying market entry by a customary 20% to 40% correction could prove advantageous for long-term investors.
“If your time horizon is two to three years and you anticipate Bitcoin to be worth $150,000 or more within that time frame, then scaling in at these prices is not a significant concern,” he explained. By adopting this methodology, investors will have the ability to manipulate emotions and profit from market declines.
Poppe further elaborated on the ramifications of macroeconomic occurrences on the volatility of Bitcoin’s price, referencing data from the Consumer Price Index (CPI).
Negative macroeconomic developments, he cautioned, could precipitate an abrupt adverse trend in the Bitcoin price. “Honestly, I think the moment that macroeconomic events are slightly negative, it would suggest that we’re going to see a correction,” he stated.
In addition, the hot January Producer Price Index (PPI) data led to extreme volatility in the market, adding to the impact caused by the January CPI report.
Notwithstanding the possibility of transient instability, Van de Poppe articulated assurance regarding the enduring potential of Bitcoin and forecasted a surge to $150,000. Conversely, alternative analysts presented a positive prediction regarding the price of Bitcoin, setting a target at $100,000.
The BTC price decreased by 0.86% to $51,516.41 as of press time on Sunday, February 18. Its market capitalization was reported to be $1.01 trillion. In contrast, the 24-hour volume of trades decreased by 12.65% to $21.72 billion. The recent bearish turn in Bitcoin price could be attributed to the negative PPI report published on Friday.
