It was an ugly week in the cryptocurrency market, with most digital currencies shedding more than 10% to close out the week. While it looks like Bitcoin (BTC) has found temporary support around the $5,400-$5,600 range, some analysts think that there is more pain ahead.
According to Bloomberg Intelligence, Bloomberg’s research arm on the Bloomberg Terminal, these analysts believe Bitcoin could fall to as low as $1,500, representing a fall of roughly 70% from current levels and a $26 billion market cap for the largest digital currency.
While fairly high level, this analysis looks to be based on the continuous moving average price of Bitcoin, which currently stands at around $1,520. The idea being that Bitcoin will “return to the mean” based on previous trading patterns in adjacent markets, despite it significantly outperforming this trailing trend line over the last 3 years.
A number of these analysts point to the ongoing drama around the Bitcoin Cash (BCH) hard fork as an additional driver of downward pressure on BTC, noting that the two new digital assets could be sucking investment capital and miners away from Bitcoin.
The slump “was sparked by the pump for the Bitcoin Cash hard fork,” said Bloomberg Intelligence analyst, Mike McGlone. “That pump that began a few weeks ago, got the market a bit too offsides with speculative longs playing for the good-old days. But this is an enduring bear market.”
BTC is now trading for $5,633 with a $97.9 billion market cap, giving the leading digital currency a 56% weight in the AltDex 100 Index (ALT100), a benchmark index for large-cap coins and tokens.