The collapse of the LUNA ecosystem affected the entire cryptocurrency market with over 80,000 Bitcoins sold as compensation. In a recent interview, senior analyst Gareth Soloway says that Bitcoin could drop as low as $12,000 as a result.
Analyst called the Terra crash ‘long-term positive’
Speaking during an interview with Stansberry Research, Soloway said that a correction is a possibility as Bitcoin has never experienced the current environment characterized by quantitative expansion by the Fed. He said it remains a possibility. Interestingly, Soloway says it’s a myth that Bitcoin is a hedge against inflation.
Bitcoin is trying to stabilize above $30,000, but analyst is setting $20,000 as the next top target for the leading cryptocurrency. He also highlights that Bitcoin needs to retest one of two levels based on historical price action:
The anticipated bottom drops to $12,000. If you look at previous cycles like 2017, when it peaked, by the end of the bear market, Bitcoin was corrected by 80-85%; guess where is 80-85%? Around $12,000… Its shine in times of inflation has always been a myth because we haven’t really experienced inflation since Bitcoin’s inception.
However, he argued that despite the high volatility experienced in 2022, Bitcoin’s long-term prospects continue to rise.
LUNA collapse could be positive for crypto
Commenting on the collapse of the Terra ecosystem, Soloway said that the event would be long-term from a regulatory front on the crypto sector. indicated that it could have a positive impact. He acknowledged that regulation is needed for the industry to grow and that the collapse of LUNA could get the ball rolling to protect investors. In part of the interview, he says:
I hope something good can come out of this, so you need governments to have some regulation to prevent things like this from coming and happening again. I think this could be a long-term positive, maybe something like this had to happen for this arrangement to continue.
With some investors buying LUNA amid the crash, Soloway warned that the move may not prove fruitful in the long run due to the dilution of crypto. Overall, the market strategist noted that the crash was unfortunate for the crypto industry, considering that confidence is at the center of the market’s growth.
Also, Soloway stated that the collapse of LUNA helped Bitcoin and Ethereum stand out as the only reliable cryptocurrencies. However, he noted that for the two cryptos to remain the dominant force, at least 95% of the other cryptocurrencies must be deleted and repeat the dot.com era. We have discussed the latest developments from the Cryptokoin.com Terra ecosystem in this bulletin.
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