The head of financial strategy at a crypto finance company explains why Bitcoin (BTC) could drop to between $18,000 and $20,000 before returning this year, and shares 4 high-end altcoin projects with long-term visions to buy when the market bottoms out. we too cryptocoin.com We have prepared the expert’s posts for our readers.
“We are currently in a complete bear market for Bitcoin and altcoin projects”
With more than $1 trillion in market cap wiped from cryptocurrencies since last November, even the bullest crypto enthusiasts have to reckon with the fact that a bear market for digital assets is here. Joseph Edwards, head of financial strategy at crypto finance firm Solrise, is poised for a downward price trajectory for the better part of last year.
Saying in September that Bitcoin could see an ‘extremely negative Q4’ amid technical pressures as well as macro and regulatory risks, Joseph Edwards predicted that the leading cryptocurrency is heading towards the $20,000 level as trading volumes decline aggressively.
However, Bitcoin hit an all-time high of nearly $69,000 on Nov. A little over two months since its peak, Bitcoin has almost halved. In an interview, Joseph Edwards comments:
We seem to be in a full bear market right now. It’s a little later than we expected to see such dips, but it’s just a natural stream of crypto.
How low can Bitcoin go?
According to the expert, the market is entering a period of prolonged declines interspersed with short-term bounces. Indeed, crypto traders are pointing out that Bitcoin’s daily Relative Strength Index indicator has reached the oversold level, suggesting that a short-term bounce is imminent. Many also see $30,000 as the bottom price for Bitcoin. Joseph Edwards has this to say about the $30,000 bottom:
I think this is optimistic. I think you’re more likely to see somewhere between $18,000 and $20,000 all year.
The expert explains that even if Bitcoin drops another 50%, it will still be above the 2017 price level peak, indicating the cyclical nature of the crypto market where each cycle brings new highs and then excessive speculation is cleared:
What matters is that the crypto market continues to build, bottoms are above previous highs and this is likely to continue.
The expert adds that tracking the fundraising activities of crypto VCs is another way to assess whether prices have bottomed out. Despite the wild fluctuations in cryptocurrencies over the past few weeks, firms are raising or investing billions of dollars in dry powder. Crypto exchange FTX has launched a $2 billion venture fund, Pantera Capital has raised more than $1 billion for a new venture fund, while Andreessen Horowitz plans to seek $4.5 billion in new crypto investments.
Venture capital investors are giving early-stage companies capital to build, almost preparing them to survive the bear market. As a result, according to Joseph Edwards, investors should wait for these crypto funds to drop a little before collecting discounted assets:
We saw this in early 2019 as well. As an individual investor or as a personal investor, when finances start to drop a bit, this is probably the time you want to buy.
4 high-quality altcoins to collect when the market bottoms out
Despite the increasingly popular narrative about the divergence between Bitcoin and certain altcoin projects, Joseph Edwards assesses that altcoins will fall with Bitcoin, especially in a bear market. This has been the case as nearly all major altcoin projects have experienced sharper declines than Bitcoin over the past week.
However, this actually bodes well for investors looking to buy worn-out tokens after they hit bottom. The key, according to the expert, is to focus on high-quality protocols with long-term visions:
You want to see something whose appeal is not just what’s on display right now, but what can be built on it, what can be built around it, or what can be built with it.
Projects that fit their criteria include Solana (SOL), Binance Coin (BNB), Uniswap (UNI), and Chainlink (LINK), all of which saw double-digit percentage drops in the past week but still failed to bottom out in the expert’s view:
We’ve seen a huge drop in the last few days. We’ll probably see a short-term bounce here. But I think the worse has to come before you start thinking about collecting things.
Besides the price drops, Solana suffered the second network issue of the month on Friday, leaving traders unable to transact on the Blockchain as crypto prices fell overall, according to The Block. Joseph Edwards, whose firm has built several decentralized financial products on Solana Blockchain, attributes the setbacks to the growing pains of a network that is still in its early stages of growth. Furthermore, the expert recommends that investors stay away from meme coins, which he believes are unlikely to return to their previous highs after the cycle is reversed:
These assets are just speculation, so I wouldn’t want to be near any of these meme coins.
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