Bitcoin ($BTC) fell to the $70,000 level during the latest downturn, and further declines are generally expected for the price.
As bearish predictions increase at this point, US investment bank Stifel, citing past market cycles, warned that Bitcoin could fall to levels as low as $38,000.
The bank listed the following factors as the reason behind this downturn risk:
- “The Fed’s more restrictive monetary policy stance”
- Regulatory debates about cryptocurrencies are slowing down in the US.
- Decrease in market liquidity
- “Large-scale outflows from US Spot Bitcoin ETFs”
The bank report stated that, looking at past Bitcoin price cycles and considering the correction rates of $BTC, the level it could fall to is well below its current price.
The bank also stated that market sentiment had entered an extreme fear phase, saying, “Market sentiment appears to have entered an extreme fear phase. This indicates a decrease in market participation among both institutional and individual investors.”
While the report indicated an expectation of a sharp decline, it did not address the timing of the decline or the possibility of a short-term recovery.
*This is not investment advice.
