Analyst Benjamin Cowen is detailing a possible worst case situation for Bitcoin and the crypto markets at massive.
In a brand new video to his 765,000 YouTube subscribers, Cowen appears on the dot-com bubble’s notorious burst for clues on the place digital asset markets might find yourself.
Trying on the complete market cap of all crypto property, the analyst says the present pullback might proceed to drop to in regards to the $760 billion mark.
At that time, Cowen says a 60% bounce could be proportional to a bounce witnessed within the dot-com period, bringing the full market cap again to the $1 trillion stage.
If and when that occurs, Cowen says the markets will land in a really tough spot.
“If we do get a 60% bounce off a future backside – let’s say it occurs on the finish of the yr – lots of people would assume that’s the underside and to a point I’d in all probability assume that’s the underside…
However we must always at all times do not forget that there is no such thing as a positive factor on the subject of investing there may be at all times a danger that you simply’re taking up irrespective of how assured you might be that one thing will play out.
And if it have been to play out the identical manner because the dot-com bubble then that subsequent low you’d nonetheless see from that time one other 27% drop to the precise backside.”
If this market construction performs out, the full market cap of all cryptocurrencies would lastly attain a backside at across the $500 billion mark.
Cowen cautions that there’s by no means certainty in markets, and says bulls could make a coherent case that the underside for Bitcoin is already in.
He tells merchants it’s by no means a nasty thought to maintain some money available in case markets transfer decrease than you assume is probably going or potential.
“That is one thing to contemplate. It’s the worst case situation. I don’t know if it’s going to play out or not, but it surely’s one thing that everybody I believe ought to contemplate when navigating the cryptoverse.
I believe lots of people have burned up to now. It’s good to be taught your lesson if you happen to haven’t already and perceive the draw back danger with cryptocurrency. If we do see one other leg down it’s going to take lots of people without warning.”
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