In the latest episode of The Market Report, Cointelegraph analyst Marcel Pechman discusses the recent bounce at $25,000 for Bitcoin (BTC), which some experts suggest is a buying opportunity. However, Pechman argues that using the inverse correlation between Bitcoin and the U.S. Dollar Index as a metric for price movements may not be effective, as it has only held true for 40% of the past 20 months.
Pechman then shifts the focus to a report by Glassnode, which reveals that the amount of BTC changing hands is currently at its lowest level since October 2020. This decrease is attributed to investor apathy and exhaustion. Pechman suggests that this lack of activity is a result of fatigue among bullish investors after the United States Securities and Exchange Commission’s continued actions against Coinbase and Binance. Given the current risk-reward ratio near the $25,000 level, Pechman disagrees that it presents a favorable opportunity for buyers.
Moving on, Pechman analyzes the prediction made by Davis Hui, the vice president of Bitcoin miner Canaan, who suggests that BTC will reach $100,000 in 2024 based on the halving and the approval of a spot exchange-traded fund (ETF). However, Pechman questions the validity of this prediction. He points out that BlackRock’s $10 trillion in assets is not entirely available for investment, as 55% is tied up in fixed-income investments and $2.8 trillion is already invested in other ETFs and alternative investment options. Moreover, Pechman highlights the risk of current holders selling their positions if Bitcoin’s price were to skyrocket, making the supply unpredictable regardless of miners’ incentives. Additionally, he explains that a spot Bitcoin ETF has been a long-standing aspiration for eight years, and there have been no significant changes to refute the Securities and Exchange Commission’s concerns, such as stablecoin trading volumes and unregulated offshore exchanges.
In conclusion, Pechman expresses skepticism about the buying opportunity presented by Bitcoin’s bounce at $25,000. He believes that using the inverse correlation with the U.S. Dollar Index as a metric may not yield reliable results. Additionally, he points to the lack of BTC changing hands and the exhaustion among bullish investors as factors contributing to the current market sentiment. Furthermore, Pechman questions the viability of the $100,000 prediction for 2024, citing concerns about BlackRock’s assets and the potential actions of current Bitcoin holders. He also underscores the challenges faced in obtaining approval for a spot Bitcoin ETF.
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