Expert predicts Bitcoin price is expected to rise over coming weeks
A top hedge fund CEO has predicted that Bitcoin’s price is expected to see a sharp rise in two weeks time.
In an interview with CNBC, Dan Morehead, Chief Executive Officer and founder of Pantera Capital has suggested a major price surge is just around the corner.
Bitcoin, the world’s largest cryptocurrency by market capitalization, has continued to rebound from last week’s lows.
Morehead said that despite a recent market sell-off that caused a drop in price, Bitcoin and the entire digital currency space is back on track to rake in returns for investors.
“We’re certainly aware that it’s a very speculative market,” said Morehead.
“Its volatile on the upside, but it can be volatile on the downside.”
All in the timing
Morehead noted that the Bitcoin price has seen a 64% fall from its peak around $20,000 down to its recent lows, but stated that these drops are entirely normal for crypto, saying:
“That’s exactly the average decline in the bitcoin market over the last seven bear-market cycles.”
While adding that “the past doesn’t predict the future,” the cryptocurrency enthusiast advised that the dip is a right correction for the digital currency based on historical data.
The hedge fund manager also stated that Bitcoin has average low periods of 71 days and that the current cycle is in its 52nd day, adding:
“So it seems like another couple of weeks and everything will be kind of normal and it could start grinding back up.”
Morehead’s calculations also align with other expert’s claims that the price lows are related to the February 16 Lunar New Year.
With many of the world’s largest crypto exchanges taking place in Asia, huge sell-offs to prepare for the annual celebration have a dramatic effect on prices.
“The January drop is a recurring theme in cryptocurrencies as people celebrating the Chinese New Year, aka Lunar New Year, exchange their crypto for fiat currency,” explains Alexander Wallin, CEO of trading social network SprinkleBit, as quoted by Bloomberg.
“The timing is about four to six weeks before the lunar year when most people make their travel arrangements and start buying presents,” he added.
The holiday takes place on Feb. 16; however, the build-up is where people start to spend their money. And with the Chinese population heavily vested in Bitcoin, it has a huge role to play in the movement of the market.
The thoughts are that people have been taking their profits into the build-up of the New Year, turning their Bitcoin into fiat currency to use for gift buying.
Further Regulation Welcome
As institutional investors enter the market, Bitcoin investors, who are used to major price fluctuations, should also gain, according to the Pantera founder.
“There’s such an institutional appetite to get exposure to this. It’s a half-a-trillion-dollar asset class that nobody owns. That’s a pretty wild circumstance. And it’s also only got a 0.1% correlation to the rest of the financial markets,” said Morehead.
Bitcoin should see its market value rise as more institutional investors start trading the “under-owned” digital currency, according to the investor.
While many view cryptocurrency regulation as a negative headwind, he also noted that more regulation should help the market grow at a healthy pace and that the U.S. has done a “commendable job”.