Guggenheim’s Scott Minerd has begin with another gloomy price outlook for Bitcoin [BTC] stating that there’s not enough institutional demand to stay the asset over $30k.
The chief investment officer of the financial services firm told Bloomberg that the institutional investor base wasn’t large enough to sustain the present prices over 31k.
“Presently, the truth of the institutional demand that might support a US$35k price or maybe a US$30k price is simply not there. I don’t think the investor base is large enough and deep enough immediately to support this type of valuation.
Minerd explained that Bitcoin remains a viable asset class within the upcoming days. Since its all-time high of $42k earlier on 8th January, Bitcoin has corrected 27% to present prices around $30,600 USD. Three prominent lower highs on the chart suggest that the downtrend is strengthening.
The Guggenheim executive also added that this downward pressure features a lot further to travel, adding that it’s “not uncommon to ascertain squeezes like this”:
“Now that we’ve of these small investors within the market and that they see this type of momentum trade, they see the chance to form money and this is often precisely the kind of frothiness that you simply would expect as you begin to approach a market pop.”
Recently on 20th January, Minerd told CNBC that he expects prices to completely retrace back to $20k. If this scenario plays out, it might entail a correction of over 50%, which went on several times within earlier market cycles. The last time BTC fell by over half was in March last year when it dropped from just over $10k to below $5,000 in solely a period of three weeks.
Guggenheim has not changed its stance on the future outlook for Bitcoin, however, with Minerd stating earlier in December that the firm’s fundamental work has shown that the future price of the leading cryptocurrency Bitcoin might be worth over $400k.
As Bitcoin approaches this psychological price at $30k, the approaching expiry of $4 Bln in BTC options could favor the bulls consistent with analysts.