There’s A “Serious Chance” Bitcoin Could Drop Below $3,000, Analysts Claim

Researchers at Element Digital Asset Management, a consulting firm that offers cryptocurrency market advisory services, recently pointed out that bitcoin (BTC) has remained within the $5,500 to $8,500 price range for over three months now. According to the asset manager, this is a sign short-term traders have been dominating the crypto market.

The investment advisory firm’s portfolio director, Thejas Naval, and its head of quantitative research, Kevin Lu, noted that:

“Within our own team, we tend to believe the [crypto]market is in an ultra reflexive state currently. It moves within a range in response to seemingly every bit of news.”

Naval added:

“This [price trend]is likely the result of trading having been dominated by short-term players that are using structured derivative vehicles with leverage to express intraday speculation.”

Moreover, the crypto trading analysts at Element Digital Asset Management believe the trading range we’ve seen in bitcoin in the last few months suggests the digital currency market may be headed toward a “triangle breakout.”

Bitcoin Trading In A “Wide Corridor”

Meanwhile, forex blogger Alexander Kuptsikevich wrote on August 31 that bitcoin’s price is exhibiting “flat dynamics” of about 1% as it saw a correction from slightly above the $7,000 mark to back down to around $6,835 in the last 24 hours.

Kuptsikevich added the flagship cryptocurrency has been trading in what he refers to as a “wide corridor” since February, when digital currency prices entered a steep downward trend after reaching all-time highs in December of 2017.

Market sentiment indicates that “the BTC price of $7,000 is the limit of optimism right now”, the forex analyst noted. He also mentioned that this summer’s crypto price trends indicate a general “lack of ideas [have]prevented any rally from developing into a long-term market recovery.”

Kuptsikevich then mentioned that even though bitcoin’s hashrate has been growing steadily, it is no longer leading to a (proportional) increase in its price, as it had when the market capitalization of the cryptocurrency market surged past $800 billion in early January.

“Serious Chance” Bitcoin Could Fall Below $3,000

Commenting on current market price movements, Kuptsikevich wrote:

“The inability of bitcoin to grow above $7,000 seems to be a serious caution.”

The forex blogger also noted that bitcoin price trends since the beginning of this year indicate there could be a

“breakdown of support [followed by a]sharp impulse to decline. In this case, there’s a serious chance [that bitcoin could fall below]$3.000.”

Notably, not all crypto market analysts seem to agree with this bearish bitcoin price forecast. As CryptoGlobe recently reported, Tom Lee, co-founder of Fundstrat Global Advisors, argued that bitcoin may end the year “explosively higher” and that he’s sticking to his $25,000 price prediction.

The Wall Street analyst mentioned there’s a relatively unknown correlation between emerging markets and the price of cryptocurrencies. The prices of both markets are currently down, however, Lee believes there’s a good chance they’ll recover, particularly if the USD weakens while the US “Federal Reserve slows its interest rate hike policy.”