The investment and analysis firm Fundstrat Global Advisors warned its clients that the already struggling cryptocurrency market is going to touch a new low, according to a Bloomberg report.
In an email to traders, the firm’s strategist Robert Sluymer predicted that considering current market trends, the value of Bitcoin and other altcoins might plunge further.
“The price structure for most cryptocurrencies remains weak and appears vulnerable to a pending breakdown to lower lows,” Sluymer noted.
Since January 2018, the cryptocurrency market has maintained a bearish trend. The total market cap went down from its peak of $827 billion to $112 billion despite the addition of hundreds of coins in the meantime, according to Coinmarketcap.com. The market leader Bitcoin endured heavy losses as it shed more than 80 percent of its value since December 2017.
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Once traded around $20,000, a single BTC is now priced at $3,425, as of press time.
Bull Turned Bear
Fundstrat’s prediction has attracted much attention given the fact that the firm was always bullish on Bitcoin and other cryptocurrencies. In January 2018, when the market was hovering at its peak, the firm’s co-founder Tom Lee predicted that, by 2022, Bitcoin might touch $125,000. Weeks after that when the asset gained a downward pace, a new high above $19,000 within five months was predicted by Lee.
Bitcoin’s dropping value has also made it very difficult to continue its mining. According to a recently published JPMorgan Chase report, it takes $4,060 to create one Bitcoin, which is much above the market price of the token.
According to Sluymer, smaller coins are at more risk compared to Bitcoin.
“A break below the fourth-quarter lows at $3,100 would imply a decline to $2,270, while a move above $4,200 is needed to signal Bitcoin is beginning to improve,” he added.