CNBC analyst Brian Kelly believes that Bitcoin (BTC) still has more downside potential. Their statement comes despite BTC trading over 70 percent from its all-time high. Here are the details…
Bitcoin needs to drop to this level for it to “bottom out”
On CNBC’s Fast Money, Kelly says that as the macro environment worsens, the flagship crypto could drop by about 50 percent from current levels. The analyst points to a rare low. According to Kelly, the price of BTC will see a bottom of $10,000. This means that its current price is lost by as much as 50 percent. It remains almost $60,000 below the 2021 all-time high recorded in November. Kelly used the following statements:
The good news is that I think we’re getting very close to a rare low. The bad news is that we may not see this bottom until Bitcoin reaches $10,000.
The CNBC analyst says Bitcoin will bottom when it experiences a “Lehman moment,” which is a scenario potentially months later. A “Lehman moment” is characterized as a moment when there is fear that turmoil in an asset or industry may become more pervasive. Kelly uses the following expressions.
It’s likely months away from a Lehman moment, so there will be one such final drop. The big ones will go bankrupt in ways you never expected. There are probably only months to this process.
What will trigger the Bitcoin crash?
According to Kelly, the Bitcoin crash will be triggered by policy mistakes by central banks. It will deepen with the loss of leverage in the market. The analyst also links to rising inflation expectations around the world, with every central bank making mistakes about monetary policy. Kelly suggests that leveraged positions in BTC will also collapse and be severely affected. Kelly’s comments are as follows:
The catalyst for this will be rising inflation expectations and every central bank in the world making a policy mistake… And I think if you take these three factors, there could be a final exit from all this leverage in Bitcoin to $10,000. Somewhere around $15,000 this drop could occur. Inflation expectations, which I see coming in the next quarter, are increasing. We all know that every central bank has already made a policy mistake. Probably will continue to do more. This is the perfect scenario for Bitcoin to have a bottom.
Currently, the largest cryptocurrency is changing hands at $19,152, down 1.54 percent. Bitcoin, which is a pioneer with its market value, broke its latest record about 8 months ago. As we reported as Kriptokoin.com, on November 10, 2021, it recorded a price of $ 68,789. Since then, it has dropped 72 percent.
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