Bitcoin has recently shifted trends and this downturn has become a hot talking point among many investors who are divided between those who have fallen prey to pessimism and those who still refuse to believe that this was all a market episode started and extinguished by Elon Musk.
After Elon Musk announced that Tesla had invested $1.5 billion in the purchase of Bitcoin, the markets began to go through the roof, and everything began to fall apart once he announced that Tesla would not accept Bitcoin because it was harmful to the environment.
Now experts and analysts are in a war of ideas as they try to predict future scenarios.
BTC Is Bearish And Approaching Support
Yesterday, May 17, Carter Braxton Worth, Chief Market Technician at Cornerstone Macro, explained that Bitcoin may have some dark days ahead.
The analyst, dubbed by CNBC as the Chartmaster, explained that Bitcoin could continue to fall until it finds support near $40,000. He argues that two key references are converging in that area: the 150-day Moving Average and the first resistance after the January 2021 peak.
Hint: there could be more pain ahead pic.twitter.com/8aGeyqHV5R
— CNBC’s Fast Money (@CNBCFastMoney) May 17, 2021
He explained that Bitcoin is currently in a historical support zone. Over its lifetime, Bitcoin has had 11 identifiable crashes over time. The average losses of these moments hover around 55% from the top – some have been over 80% while others have hovered around 30%.
In other words, Bitcoin may currently be in a decisive support zone that could extend to around 35K should the 55% downtrend continue. Since the current ATH, Bitcoin has lost about 37%, losing all the gains since the second week of January 2021.
He explained that support can fluctuate, and its determination is not an exact science.
Support is not a plywood border and concrete floor; it’s a mattress top. You were down to support, but you can sink into support like a child jumping on the bed in a hotel room.
Fundamentals Have Not Changed. Bitcoin Bulls Are Still Among Us
But others are not so pessimistic and see a bright light at the end of the tunnel. Bitcoin’s fundamentals have not changed, and they think that as soon as the hype and fear dissipate, Bitcoin’s natural uptrend will continue.
Karen Finerman, CEO of Metropolitan Capital, is part of this group. A few hours ago, in a panel discussion with CNBC, she explained the reasons behind her optimism.
It’s getting hot in the #HODL trade!
— CNBC’s Fast Money (@CNBCFastMoney) May 18, 2021
Karen Finerman talked about a survey conducted by the Bank of America, which reported that Long Bitcoin is the most overcrowded trade in the whole world. She believes that a lot of momentum traders are riding the wave, but the majority of investors are putting their money into bitcoin vecause of its fundamentals:
We’ve seen drawdowns bigger than this many times before. The question is: Do you still believe in the theory behind Bitcoin? I actually do. I’m long, I’ve been known for a long time … so I guess I’m in the overcrowded trade of the world.
During the panel, experts argued that the strong presence of institutional investors and investment products oriented to the world of traditional finance has served to give some maturity to the markets, which may help in the near future avoid manipulations and modify the dynamics of the crypto market.