Bitcoin, the leading cryptocurrency by market capitalization, has been experiencing a sharp decline in value since reaching an all-time high of over $64,000 in 2021. According to some analysts, the recent drop below $30,000 signals that Bitcoin is entering a bear market, a prolonged period of falling prices and negative sentiment. One of them is Wise Advice, aka Money Guru, who predicts that Bitcoin will plunge to $12,000 in a final capitulation wave before the end of the year.
A fake pump
Money Guru, a crypto analyst with over 100,000 followers on Twitter, posted a tweet on Oct. 11, 2023, warning that the latest Bitcoin rally from under $17,000 was a “fake pump” that would precede another sell-off. He outlined his expected price moves in the near term, saying that Bitcoin would first drop to the $19,000 to $20,000 range, then bounce back briefly as buyers take advantage of the low prices, and then crash to $12,000 as the last wave of panic selling occurs. He said that this scenario would mark the end of the brutal bear market and the start of a new bull cycle.
A historical price pattern
Money Guru’s forecast is based on his analysis of Bitcoin’s historical price patterns and correlations with other markets. He noted that Bitcoin was heavily correlated with the Nasdaq, a tech-heavy stock index that has been under pressure due to inflation fears and rising interest rates. He also pointed out that Bitcoin’s current decline was similar to its previous bear cycles in 2014 and 2018, when it lost over 70% of its value from its peak. He said that Bitcoin’s “inflation hedge” case was dead and that it was not digital gold as some had claimed.
Has Bitcoin bottomed out?
However, not everyone agrees with Money Guru’s bearish outlook. Some analysts contend that Bitcoin has already bottomed out and that it will soon resume its upward trend. They cite various factors that support their bullish view, such as the growing adoption of Bitcoin by institutional investors and mainstream companies, the increasing innovation and development in the crypto space, and the limited supply and high demand for Bitcoin. They also argue that Bitcoin is still a viable hedge against inflation and currency devaluation, as it offers an alternative to fiat money and traditional assets.
An unpredictable market
As with any prediction, Money Guru’s analysis may or may not come true as described. Given crypto’s volatility and unpredictability, targets can be invalidated quickly by unforeseen events or market manipulation.
Still, his projection offers an interesting possibility for traders who want to prepare for different scenarios and take advantage of potential opportunities. Whether Bitcoin will continue to fall or bounce back remains to be seen.