Cryptocurrency Price Predictions, When to Buy in a Bear Market: Blockchain Founder

  • Richard Hart says bitcoin tends to fall 85% from all-time highs and ether is even lower.
  • He adds that inflation and rising interest rates are adding noise to this crypto cycle.
  • He believes that investors should buy the dip on ether rather than bitcoin.

May 4 formed a milestone in the stock market’s downward trend after

Federal Reserve

He announced a 0.5% rate hike, the second increase in this cycle and the largest since 2000. Cryptocurrency has also been affected: as of Wednesday, Bitcoin is down as much as 26% to around $29,500, and Ethereum is down about 31% to 2,000 dollar .

How low they can both go is anyone’s guess at this point. But the one who has succeeded in this in the past is Richard Hart. The founder of Hex, an Ethereum-based token that rewards investors for betting, is proud to call the tops and bottoms of the cryptocurrency market.

For example, on December 19, 2017, he tweeted that cash was coming out of bitcoin, marking the start of altcoin season. This usually follows a cycle that starts with the Bitcoin price peak and then altcoins before the entire market crashes. In fact, Bitcoin had a four-day downtrend that eventually turned into four years

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In 2019, he told the audience at a summit that bitcoin would hit $60,000 in a year or two. In November 2021, Bitcoin reached an all-time high when it approached $70,000 before dropping 56% so far.

He told Insider that he uses a combination of technical analysis and fundamentals to predict when market trends will change. One rule, in particular, is “buy the rumor and sell the news.” This means that periods of speculation about an upcoming event are good times for betting, but once the news is confirmed, get out.

For example, in 2017, the absolute peak of bitcoin was the day the Chicago Mercantile Exchange launched its bitcoin futures contract. A similar event occurred in 2021 when the near-absolute peak of bitcoin was today listed on Coinbase on the Nasdaq, the Heart recalls.

“So bitcoin has soared significantly in 2021 on the institutional buying pressure front running Coinbase List, which pumped bitcoin, which pumped Grayscale Trust, which pumped Coinbase,” Hart said.

He noted that by the time the coin reaches the top, everyone has already bought and there is nothing left to do but sell. Compare that to buyer’s remorse. If you are the one who won the auction, that means no one is willing to pay more.

Even meme coins follow the same pattern. For example, Dogecoin (DOGE) was on its way to its heyday when investors expected Elon Musk to mention cryptocurrency during an episode of Saturday Night Live he was scheduled to host on May 8. day. So far, it’s still down 86% from its peak.

Betting in a tough market

Economic factors can have additional effects on the crypto market. Inflation could prevent cryptocurrencies from dropping as deeply as they have in previous cycles. On the other hand, he said that higher interest rates could cause cryptocurrencies to plunge deeper than what has been historically observed.

Another thing to note is that digital assets are speculative and tied to the stock market. Since you don’t need to buy bitcoin to pay rent or products, Hart said, there is no underlying demand.

“We’re going to keep going down as long as the stock market goes down unless it’s a new venture,” Hart said. “Some of the newer projects will be able to weather bearish market pressures, but the vast majority of assets will deflate in price as long as interest rates go up and the stock market goes down.”

For now, Hart said, investors should sit on the cash and wait for a bottom. While the timing of any market is very difficult for any investor, Hart says that Bitcoin’s bottom can be calculated in two main ways.

The first and best method, he said, is after an 80% to 85% drop from peak prices. Historical trends show a gradual increase in the price of Bitcoin after the halving event, which is when the amount of BTC per block decreases. This generally occurs every four years and indicates a contraction in supply, followed by a rise in price.

Hart said the price will continue to rise sharply until bitcoin drops by about 85% of its total value. Based on this metric, it is estimated that Bitcoin will bottom out somewhere between $10,600 and $10,350. However, in an effort to catch the decline, Hart said $11,000 is a good buy.

The second way to tell if it’s time to come back is when enough time has passed. That’s usually 365 days after its all-time high, he said. In December 2017, bitcoin topped nearly $20,000 at its peak before dropping below $4,000. It wasn’t until March 2019 that it started to climb again above this resistance line.

“I care about price more than time,” Hart said. However, you can’t wait forever, he pointed out. So if there are no more recent lows, it’s safe to say, this is the bottom.

However, even when sold, Heart still considers bitcoin a “neglected asset” primarily because its returns pale in comparison to other digital assets. Specifically, he said, Ether outperformed Bitcoin three to one. The Ethereum blockchain also has non-perishable tokens, stablecoins, and developers building on it.

As for the ether, Heart believes it’s one of the only crypto investors that should load up during a bear market. The bottom price is expected to reach $750. However, the dip may be a flash in the pan. If you don’t want to miss out, Hart said, a good buy would be around $1,000.

Historically, the tops and bottoms of ether have been much steeper than bitcoin, seeing bottoms of around 95% from all-time highs.

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