Bitcoin (BTC-USD) supporters are reaffirming their predictions of new all-time highs for the world’s largest cryptocurrency after enduring a rout that saw the digital asset plummet by as much as 20% between Sunday and Monday.
Following a weekend crash below $50,000 — a level not seen since February — Bitcoin's price has rebounded by roughly $6,000, leaving it down 14% over the past week.
Despite the worst week for Bitcoin since the collapse of the FTX cryptocurrency exchange in 2022, bullish investors still anticipate a rally that could push the cryptocurrency above $100,000 by the end of 2024. Bitcoin set an all-time high of $74,000 last March.
“The case for new all-time highs in 2024 is still very much in play,” Martin Leinweber, director of digital asset research at Market Vector, told Yahoo Finance. “If we can regain the old highs around $72,000, I think it's not unrealistic to see Bitcoin between $80K and $100K.” Onramp Bitcoin's head of macro strategy, Mark Connors, maintains his March prediction that Bitcoin will hit $110,000 in 2024.
Bitwise Asset Management’s chief investment officer, Matt Hougan, also foresees new all-time highs later this year following the recent pullback.
"We’re seeing that Bitcoin investors are long-term investors," Hougan told Yahoo Finance. "They’re not, sort of, paper hands that are folding."
However, the optimism is tempered by renewed questions about Bitcoin’s status as a safe haven or uncorrelated asset, a point often touted by supporters and even BlackRock CEO Larry Fink. The recent correction, mirroring technology stocks, challenges this narrative.
"Bitcoin is still a risk asset," said Leinweber. "It's not the same kind of store of value as gold. It's still the smaller cousin because it’s lacking the track record and institutional buy-in." He and others noted that Bitcoin, trading 24/7, is often sold first during market-wide drawdowns.
Bitcoin’s recent price declines appear tied to a cross-market unwinding of trades related to the US dollar’s strength against the Japanese yen. With those levered bets gone, firms are closely watching flows in and out of new Bitcoin exchange-traded funds managed by large Wall Street firms.
On Monday, US Bitcoin ETFs saw net outflows of $168 million while volumes exceeded $5.2 billion, double the previous day’s amount, according to preliminary estimates from JPMorgan.
"Traders will be more cautious now that they've burned their fingers, so it's more an investor's market going forward," Leinweber said.
Fundstrat Global Advisors’ digital asset group is maintaining its prediction for Bitcoin to reach $126,000 in 2024, viewing the recent drawdown as not indicative of a market top.
Bitcoin’s recent double-digit decline is "really just a drop in the bucket," Mark Newton, head of technical strategy with Fundstrat, told Yahoo Finance.
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