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Bitcoin’s latest drop below $100,000, its lowest level since June, has raised concerns among crypto investors. However, two well-known market figures offer a more optimistic view on where Bitcoin could be headed next.
Bitwise chief investment officer Matt Hougan believes the latest decline reflects the capitulation of high-end retail rather than the start of a deeper collapse. “Crypto retail is in extreme despair,” he said CNBC’s Crypto World Tuesday. “We’ve seen leverage explosions … the market for some sort of native retail crypto is just more depressed than I’ve ever seen it.”
Hougan said there are more and more signs that sales are nearing exhaustion. “When you go out and talk to institutions or financial advisors, they’re always excited to allocate to an asset class that, if you step back and look at it over the course of a year, is still a very strong performer,” he said.
Hougan added that once the selling flush-out ends, institutional demand could push prices higher. “I think Bitcoin could easily end the year at new all-time highs,” he said, citing a potential range of $125,000 to $130,000.
Related: Bitcoin Drops Below $100K As Analysts Say BTC Is Ready To Go Lower: Here’s Why
US debt will force the Fed into “stealth QE” – Hayes
Meanwhile, former BitMEX CEO Arthur Hayes pointed to structural liquidity as the key driver of the next rally. On a November 4 essayargued that the US government’s growing reliance on debt issuance would force the Federal Reserve to expand its balance sheet.
He described this as “stealth QE,” where the Fed provides cash to the financial system through its Standing Repo Facility to support Treasury funding.
QE stands for quantitative easinga monetary policy employed by central banks to stimulate an economy by buying financial assets, such as government bonds, thereby increasing the money supply.
“If the Fed’s balance sheet increases, this is positive dollar liquidity, and ultimately pumps up the price of Bitcoin and other cryptocurrencies,” Hayes wrote. He believes that this cycle of increased government borrowing and quiet liquidity creation will “reignite the Bitcoin bull market.”
Related: Bitcoin finally escapes ‘fear’ as confidence returns to top of crypto
Bitcoin enters the bear market
On a Tuesday place on X, Mosaic Asset and business resource The Letter Kobeissi said that Bitcoin (BTC) has officially entered bear market territory after falling more than 20% from its all-time high on October 6.
Some other traders too warned that crypto prices could extend the losses. Investor Ted Pillows he said the market was in “free fall”, predicting a potential retest of the CME $92,000 gap if the $100,000 zone fails to hold.
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