Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, engages in a conversation with Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com. The topic being around “why Bitcoin is down”, they delve into the underlying reasons behind the recent Bitcoin sell-off following the ETF approval.
Soloway discloses the potential extent of Bitcoin’s decline and identifies the key level at which he would consider buying. Additionally, he provides his post-halving price forecast for Bitcoin, offers insights into the possibility of a U.S. recession, and analyses factors influencing equity markets. Soloway also shares Technical Analysis price targets for various assets, including the Nasdaq, silver, gold, and more.
For a concise summary of the video’s key insights, continue reading, or watch the complete interview here.
Michelle: You called it correctly, expecting a selloff after we got news of the approval. Break down some of the factors that have been bringing the price of Bitcoin down.
Gareth: If we go back to the 2017 Bitcoin bull market high, that was when the Futures were approved so there was a lot of hype. If we go to the first high in 2021 when the IPO of Coinbase debuted, that marked that high and we had a correction to 30,000. We then go to 2021 and that was the ETF for the Futures and that marked that high as well. So, if you just look at the kind of consistency that these big news stories create on the top of Bitcoin, it makes sense why that would be the key level or why it would sell off on the news.
Michelle: As you pointed out, S&P and NASDAQ 100 both hitting all-time highs, defies conventional wisdom and expectations. If we continue to see equity markets rally, does Bitcoin catch up?
Gareth: I think if we continue to grind higher in the S&P and the NASDAQ, eventually the risk on trade takes back over, absorbs all the GBTC selling pressure and ultimately pushes Bitcoin back up, so really the one case where Bitcoin could sell off is only if we see an equity market top.
Michelle: What is your outlook on other altcoins? I know you tend to watch those especially as we see Bitcoin start to find its footing.
Gareth: Ethereum obviously initially rallied to the upside on that spot ETF approval. In terms of my bias, I’m going to let the levels do the talking. If we break below this trend line (points to chart) I start looking for that bigger move down. As long as we hold this we could be headed back within a couple months maybe to those upside targets of 2,700, even 3,000. and again, that would be on the narrative that eventually the SEC will approve the Ethereum ETF.
Michelle: Let’s circle back on those GDP numbers. It came in at a 3.3% increase as opposed to 2% – quite a dramatic increase. What does this mean in terms of your expectations from the FED?
Gareth: I was looking at the FED watch tool a little while ago and interestingly enough even with the stronger data we’re now seeing, there’s now back on the table a 50% chance of a Fed cut in March. As of this morning that wasn’t the case before the GDP number… I think that based on what I’m seeing, we are likely headed to a recession by the second half of this year. In general, everyone assumes in an election year they won’t let the markets fall but 2008 was also an election year and we saw one of the worst market drops.
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