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The analysis was conducted by Marion Laboure and Galina Pozdnyakova and it predicts a 30% rally for Bitcoin by the end of 2022. This is still far from the cryptocurrency’s previous all-time high of around $69,000.By marketing an idea rather than a product, they built a solid foundation for the $72 billion-a-year diamond industry, which they have dominated for the last eighty years. What’s true for diamonds, is true for many goods and services, including Bitcoins.The analysts wrote the following on the factors that contribute to the complexities of measuring the value in Bitcoin and other cryptocurrencies, and why this could increase its downside risk:
Stabilizing token prices is hard because there are no common valuation models like those within the public equity system. In addition, the crypto market is highly fragmented. The crypto freefall could continue because of the system’s complexity.
The Short-Term Horizon For Bitcoin
As NewsBTC reported, experts more familiar with the crypto industry believe Bitcoin and other large cryptocurrencies by market cap will keep on following the stock market. Former CEO of crypto exchange BitMEX Arthur Hayes expects this correlation to contribute to the decline in BTC’s price.
However, at some point during 2022, the crypto market will start to decouple from stocks and the U.S. major equities indexes, the S&P 500 and Nasdaq 100. The bullish momentum for the digital assets could be supported by a decline in both the value of legacy markets and a downside trend in terms of correlation with cryptocurrencies.Related Reading | Ethereum (ETH) Bends Toward $1,000 As Doubt Fills Crypto Markets
As Hayes explained, that’s when you want to pay attention:For me to hoist the flag in support of selling fiat and buying crypto in advance of an NDX meltdown (30% to 50% drawdown), correlations across all time frames need to trend demonstratively lower.