Mohamad El-Erian, Chief Economic Advisor at The Alianz has again mentioned his expected price for Bitcoin (BTC). He believes Bitcoin will stabilize around $5000, a number it is not too far from already. Interestingly enough, El-Erian has mentioned this price before and believes the current price and previous highs were due to over speculation. Is it possible he could be right?
It is hard to argue with El-Erian’s evaluation of Bitcoin especially when the price hovers so close to his prediction now and he is a renowned economist. Many traders started new long Bitcoin positions on the past dip when it tested 5k. However, right now, price action seems to dictate that BTC likes the 6k area. It is still possible that prices may dip, especially if traders and investors heed the words of governments and other institutions that Bitcoin is literally designed to disrupt. If not, and adoption continues to grow, Bitcoin could see a steady rise in value.
With the recent issues around Ethereum and the Blockchain technology, more and more traders and investors, as well as businesses, will look towards Bitcoin as the stable and reputable asset to invest and partner with. So there is a lot of bright side for Bitcoin and it has been defending itself well despite the bloodbath in the crypto markets recently.
Another thing to consider is, institutions may want to see Bitcoin dip more not only so they can enter the markets at better prices, but also because many traders can short the coin on the futures market. So could some of this pr and fud be to aid other institutions shorting futures? Everyone is a naysayer while behind closed doors they are setting up crypto trading desks and trying to start etf’s. This should tell you where their heads really are and that there is a long game being played here.
Truth is Bitcoin is not going anywhere unless a serious competitor comes along and provides something better. However, Bitcoin might fade away, but the idea that a digital, decentralized asset can come along and revolutionize finance would remain true. That’s the big picture. For the traders and non-hodlers, just focus on price action and have your price targets and your stops set.