The crypto slide continues as investors flee to whatever they think might hold value. It looks as though there is still more pain to come as no let-up in inflation and consequent rate hikes mean that liquidity is being sucked out of crypto, driving it lower. But what about when crypto hits the bottom?
Bitcoin has seen its worst quarter since around the time of its beginnings in 2011. At time of writing the bitcoin price is just a shade above $19,000, and given that the June monthly candle closed below the $20,000 support, it is likely that the price might continue back to the $17,500 local low, and then perhaps on to the major support around $14,000.
BK, the bitcoin expert on the CNBC ‘fast money’ show, said on Thursday that he sees “generational buying opportunity” coming up for a crypto market that has been badly beaten down.
“The good news is I do think we are getting a lot closer to a generational bottom. The bad news is it might not be until bitcoin hits 10 grand, and by the way, the catalyst for it is going to be inflation expectations picking up, and every central bank in the world making a policy error.”
The expert says that the flushing out of leverage that is currently taking place will be what takes bitcoin down to a 10 to 15k bottom. He thinks there is still a lot of leverage out there, but that the buyers of last resort are getting their bids filled for pennies on the dollar.
When asked if we were potentially months away from crypto’s “Lehman moment”, BK responded in the affirmative. He stated that it would probably take someone big going down who would be least expected, and that would result in the final last flush out.
Opinion
All this probably doesn’t leave the average Joe or Jane investor in a good place. Much of retail has no doubt already been flushed out, and this would certainly include those who were using leverage.
Even those who had done the right thing, and had dollar-cost-averaged in, would be starting to get extremely nervous as their positions have probably gone way under water, and the current economic crisis has forced them to sell.
For anyone left in, and/or has dry powder still available for that time when crypto finally reaches utter capitulation, the buying opportunity of a lifetime potentially awaits.
When that time arrives, the question before buying could be “will private digital assets have a future?”, and if the answer is ‘yes’, then the brave, and those who are prepared, could be on the right side of the complete monetary revolution that is to come.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
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