The CEO of one of top bitcoin on-chain analytics companies revealed to its more than 292,000 Twitter followers that historical data shows that the Bitcoin could drop to $14,000about 50% of its current price.
According to Ki Young Ju, CEO of platform CryptoQuant, a metric is “flashing” a huge red flag for Bitcoin bulls. “Bitcoin could hit $14,000 based on historical MDD.”these.
A maximum decline (MDD) is the maximum loss observed after an asset peak, before a new peak is reached. MDD is an indicator of downside risk over a specified period of time.
Beginners sell, companies buy
According to the analyst, new Bitcoin investors are in trouble if market prices fall in their worst-case scenario. The analyst pointed out that institutional bitcoin investors are now the dominant force in the market.
“Market makers, including those sold by LFG (custodian of the luna foundation), sent 84,000 btc ($2.5 billion) to various exchanges last week.”
“I don’t know if they’ve ended the selloff, but institutions should pile up as Coinbase has digested most of the selling pressure.”
Ju said institutional investors likely bought large amounts of bitcoin during the cryptocurrency price crash last week.
“Retail Investors Exit Cryptocurrency Market (Sell).”
Although individual investors are seen selling in an environment of fear created, it should be noted that institutional investors have been buying more bitcoin than ever before.
Ki Young Ju has published a chart of the average entry price for each generation of Bitcoin investors over its 11-year history, tracking the UTXO range metric, which tracks the potential price level where holders at long term have accumulated bitcoins.
#Bitcoins OG Admission Price:
1st Generation – $1.3
2nd generation – $653
3rd Generation – $8,717
4th Generation – $43,582
I am the 3rd generation. Hang in there, 4th generation. pic.twitter.com/iWkEwFO4zV
— Ki Young Ju (@ki_young_ju) May 14, 2022
Mike Novogratz says altcoins could drop 70%
Galaxy Digital CEO and Bitcoin bull Mike Novogratz shares a similar view with CryptoQuant CEO, issuing a warning to crypto traders that altcoins could still see massive devaluations.
Novogratz said altcoins are still at risk of losing more than half their value, even though they are already well below their all-time highs.
“Altcoins are down more than 80% from their highs. In 2017, it was over 95%. More than 70% drop, What I mean is that picking backgrounds is dangerous, and if you do, move slowly.
Alts are down more than 80% from highs. In 2017, it was over 95%.
It’s still 70% less.
What I mean is picking the funds is dangerous and if you move slowly.
-Mike Novogratz (@novogratz) May 20, 2022
The billionaire also gives a gloomy outlook for the broader financial market, suggesting that cryptocurrencies are set to drop further.
“A problem with risk modeling is that all of the examples of stress over the past three decades that led to bottoms are occurring in an environment of Fed easing. We are still early in the tightening cycle. means that trust in models and even “gut feeling” must be lower.”
While Novogratz says the macro scenario looks bearish, he remains bullish on the recovery of cryptocurrency markets.