After experiencing a considerable downturn, Bitcoin‘s value has currently stabilized. James Bull, a well-regarded market analyst, projects a 78% likelihood that Bitcoin (BTC) will close the CME gap within the coming three weeks. Should BTC’s value decline further, altcoins could incur significant losses, dampening CME expectations. We delve into revised predictions from various market experts.
Will Bitcoin Close the CME Gap?
Historically, CME price gaps are usually closed within a three-week period. Although this isn’t a certainty, a 78% likelihood is notably high. Even with January’s major sell-offs, there is anticipation of a rebound even before any potential decline. After substantial downturns, a temporary recovery often takes place, even if losses persist. James Bull forecasts that Bitcoin could reach more favorable levels soon.
“The time has come to close the CME gaps at $83,000 and $95,000. Seventy-eight percent of them close within three weeks. These act like magnets. How so? The end of the government’s shutdown, likely to occur next week, will provoke extreme volatility in altcoins. Many coins could witness a 20-fold increase from $20,000 to $4 million. Yes, most might fall to zero, but for one winner, twenty might fall to zero. (I’ve invested in crypto; this is not financial advice.)”
Sharing data charts, James highlights that Bitcoin has never faced a downtrend longer than four months over the past seven years. The cryptocurrency is projected to conclude February on a stronger note than its current standings. However, during the FTX downfall of 2022, BTC surrendered its previous all-time high as support, an event not seen before.
What Should Altcoin Holders Expect?
Miles Deutscher recalls the significant impact of prior declines like the FTX collapse and the May 2022 LUNA incident. The recent downturn witnessed even greater consequences, with liquidation volumes surpassing past records, exceeding $2.5 billion in losses.
Ran Neuner suggests a bold strategy: selling altcoins. He points out that such pessimistic stances often precede major market recoveries. However, he acknowledges a risk if his advice leads followers to incur losses.
“SELL YOUR ALTCOINS. HERE’S WHY. Altcoins seem ‘cheap’ due to a 70-90% value drop. But being cheap isn’t synonymous with being undervalued. Returning to data, less than 20% of the top 200 altcoins reached a new peak in the last complete cycle. Most couldn’t recover, gradually losing value against Bitcoin. Here’s an overview of this cycle. In 2017, there were thousands of tokens in cryptocurrencies. Now there are over 120 million tokens. Recovery is no longer the base scenario. Disappearance is the base scenario. Hence, the common phrase: ‘I’ll wait for it to come back.’ This is often said just before capital gets stuck for years. This cycle isn’t about holding more; it’s about holding less of what’s less important.”
Key considerations drawn from market observations include:
- Bitcoin’s historical patterns suggest potential short-term recoveries despite downturns.
- The likelihood of closing the CME gap is notable, although not guaranteed.
- Massive liquidations signify ongoing market volatility, questioning altcoin stability.
- Experts propose selling altcoins as they often underperform in the long term.
- The current market cycle demands a reevaluation of investment strategies amidst evolving token landscapes.
Despite previous downturns, many analysts see potential in Bitcoin stabilizing and potentially improving. However, they express caution toward altcoins, given their historical volatility and performance challenges. The upcoming weeks will be crucial in assessing how closely current conditions align with past market behaviors.
