Another drop is in the books, and bitcoin is hovering at a monthly low of approximately $ 7,400. While predictions remain relatively varied, some believe that bitcoin may be heading towards a “death cross,” and that the price could drop to new levels before any serious recovery is experienced.
First and foremost, a death cross occurs when an asset’s short-term average sinks lower than its long-term average. Sadly, this has occurred with bitcoin, as the currency’s 50-day marker is now lower than its 200-day marker. The currency has been hit with multiple marketing and advertising bans from major internet players including Facebook, Google, Twitter, and even LinkedIn, and it can be argued that the currency has taken a few serious hits in the process.
A death cross has not been witnessed since early 2015, when bitcoin was trading for less than $ 200. The good news is that the currency rose prominently above $ 400 by the end of the year, so while it’s safe to say there is likely be another waiting game involved, the currency’s price may still experience the price hikes bullish advocates like Thomas Lee and Bill Barhydt so confidently claim will occur by mid-year.
In a recent interview, Lee discussed the notion of “hodling,” and said that now is the time to engage in it. Hodling occurs when bitcoin investors, typically those who are more experienced, simply hang on to their assets and wait for future gains. One might feel the urge to sell everything off at first glance once the price falls, but hodlers usually know that time is a definitive market factor, and sometimes patience can go a long way.
Lee was adamant that now is not the time to sell, and investors should hang on for as long as possible so the market could recover. Overall, he remains adamant that bitcoin will garner newfound strength by early summer, and that the regulatory hurdles negatively affecting cryptocurrency will receive clarification, thus assisting the market.
“Long-time holders are worried because they have big gains, and they’re worried about falling prices,” he stated. “But bitcoin is a great store value. It works… It’s kind of boring because it’s not the latest and most exciting project, but it also is one of the most liquid ways to get exposure to crypto.”
Fast Money trader Brian Kelly also believes bitcoin is posed for solid recovery. He mentioned that the currency’s technical behavior is similar with what users witnessed in August of 2017 – just prior to a major price uptick (bitcoin nearly grazed $ 20,000 three months later). He’s confident the market has what it takes to turn itself around in the coming months and put bitcoin back on top.
Morgan Stanley has also published a report about bitcoin, saying that while it has lost nearly 70 percent of its value since December, much of this can be attributed to standard corrections typically seen with any asset, whether they be cryptocurrencies or traditional stocks. Additionally, the report claims that such drops have “historically preceded rallies,” and that bitcoin could wind up closer to its 2017 figures sooner than users think.