Recently PodcastBitcoin analyst Natalie Brunel asked David Hunter, chief macro strategist, about his outlook for Bitcoin’s price. Hunter had previously warned that Bitcoin could fall from over $100,000 to $75,000, a call that came to fruition. According to him, the cryptocurrency will likely fall to $50,000.
However, Hunter clarified that his view is based solely on technical analysis.
Hunter Questions Bitcoin’s Liquidity Environment
Discussing why Bitcoin has performed so poorly alongside gold, Hunter asked whether the market actually has the level of liquidity that many investors believe it does.
“We’ve shrunk the balance sheet here from nine trillion to six and a half, or 6.4 now or 6.7, I think. So the liquidity, at least the traditional liquidity of printed money, is not really there.”
He added that although the authorities have injected liquidity into the banking system at certain points, he is not convinced that broad liquidity is expanding strongly.
“I’m not sure we have this massive liquidity that some people want to look at interest rates and things and say liquidity is expanding. I’m not sure we have that much.”
BTC will drop to $50,000?
Hunter said he took a technical position on Bitcoin worth more than $100,000 after studying its chart.
“From what I read in the charts, this thing could go to $75,000. And then I said from then on, next step, maybe $50,000.”
He also stressed that investors should treat his forecasts with caution because he does not follow Bitcoin closely.
“I’m pessimistic about Bitcoin, but I’m the first to tell you that I don’t follow it. So people should take this with a grain of salt, a purely technical reading.”
According to Hunter, the current weakness may be driven more by market momentum than fundamentals.
“Momentum begets momentum. A lot of the reactions in Bitcoin have more to do with the downside than fundamentals.”
He compared Bitcoin’s price movement to other markets such as silver, where investors rushed after prices rose from $100 to $120, only to later find themselves underwater and sell with the momentum reversing.
Bitcoin faces a major long-term test
Hunter compared Bitcoin’s situation to silver, where investors rushed through a strong rally before selling off once momentum reversed. It is believed that similar behavior could affect Bitcoin, especially when leveraged players face pressure.
However, host Brunel remains optimistic that Bitcoin can withstand any major pullback. Hunter said he wants to see Bitcoin survive the global economic downturn before making a final ruling.
“I want to see it go through the motions. Then, I’ll be able to find out if it’s as real as everyone says it is or not.” He said.
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