A “Bit” Of A Rollercoaster Ride: 3 Market Observers Weigh In

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By Diamond-Michael Scott

The bitcoin price has been on a real topsy-turvy ride in recent days. After a meteoric rise during the first three months of this year, it has been on a “bit” of a roller coaster ride over the past couple of weeks or so. Here is what three market observers had to say about these recent developments: 

Don Guo, CEO at Broctagon Fintech Group

“We can most likely attribute Bitcoin’s sharp decline to the fact that US investors are facing a capital-gains tax if they sell the cryptocurrency after holding it for more than a year amidst reports that President Biden is contemplating doubling this for the wealthy.” 

“Further, investors will see the price drop across the crypto market as an opportunity to widen their portfolio by averaging up their investment outlay and buying in new Altcoins such as Ethereum. Therefore, likewise for Bitcoin, a further drop is unlikely as the big conglomerates will see it as an opportune moment to make their entry in acquiring Bitcoin while prices are relatively low.”

Anton Chashchin, Managing Partner at CEX.IO Prime Trading 

“There is substantial risk that Bitcoin is set to face the largest price correction it has seen since its March 2020 market crash. Inevitably, President Biden’s proposal to impose taxes on the wealthy has rattled markets globally, thereby impacting cryptoassets.” 

“In addition, estimated leverage ratios from all exchanges are very high as per Crypto Quant data, which opens the possibility for a cascading liquidation run towards which could lead to even further price dips if long term buyers don’t support the market here.”

“Typically, markets that are ‘too long’ are unfavourable among crypto investors, so we don’t expect these recent price declines to mark the end of its recent bullish run.”

Gavin Smith, CEO at Panxora Group

“These sharp price declines should come as no surprise to the wider market participants. Any asset which has risen as much as Bitcoin over the past 12 months can be expected to have some pullbacks as some people take profits, and we’re currently seeing evidence of this.” 

“To that point, these sudden dips are particularly the case with Bitcoin as recent price action has shown that, while an exceptional investment opportunity, Bitcoin is still an emerging asset class that is subject to the volatility common with new emerging assets.”

“Further, we have found that Bitcoin has exhibited a decline averaging 40% at least once every year before recovering to new highs. Therefore, should this latest decline follow true to form then we wouldn’t be surprised to see Bitcoin drop to around $39,000 USD before then recovering and reaching new all-time highs”

“It’s crucial for investors to keep in mind that the investment narrative for Bitcoin is still intact, however anybody entering the market should have an effective risk management approach to protect against these drawdowns.”

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