An Analyst warns investors to have a ‘very strong stomach’ to ride out Bitcoin’s short-term volatility.
Bitcoin (BTC) is showing positive signs in the long run, but one analyst warned that investors need to have a “very strong stomach” to survive short-term volatility.
What happened: Matt Marley, chief market strategist at Miller Tabak, explained to CNBC on Thursday that regulatory risks and the retracement of this year’s nearly 200% surge mean bitcoin could fall further in the near term.
“If the government steps in and wants to regulate it more, I think some of the excess liquidity will move to another area,” Marley said on CNBC’s “Trading Nation.”
This, combined with a pullback, could lead to a “considerable decline,” but analysts still believe that the top cryptocurrency will be “longer-term higher.”
Maley claimed that Bitcoin’s likely bottom could be in the $25,000 range, about 40 percent below the cryptocurrency’s all-time high of $41,999 on Jan. 8.
“You’re going to see these big moves and big drops in bitcoin, so traders have to be very, very nimble and long-term investors have to have a very strong appetite,” the analyst told CNBC.
Why it matters: Bitcoin has had a major correction over the past two weeks, breaking the $40,000 mark below $10,000 after a blistering rally that began last July.
Earlier this week, U.S. Treasury Secretary Janet Yellen expressed concern about the use of cryptocurrencies to fund illicit activities, leaving investors concerned about possible unfavorable regulations from President Biden’s administration.
Price Action: Bitcoin is trading down 11.3% at $30,712.41 as of press time on Thursday.
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