As most assets in the cryptocurrency market continue to struggle with the aftereffects of the FTX collapse, Bitcoin (BTC) is persistently staying below the critical resistance of $16,600, and one trading expert believes it could drop even further.
Indeed, the InTheMoneyStocks.com chief market strategist Gareth Soloway has said that Bitcoin could drop to $9,000 in 2023 but that he’s not terribly concerned over the token’s longer-term performance during an interview published on November 26 with Small Caps’ Kerry Stevenson.
Observing the S&P500’s performance after the Lehman Brothers collapse and noting that the stock market had declined by about 40-45% over the following five or six months, Soloway used the same formula to calculate that Bitcoin could sink to $9,000 in the months following the FTX crash.
Bitcoin longer-term believer
That said, he admitted that he wanted “to be in Bitcoin longer term,” which is why he’s going to ‘hodl’ more, or as he explained: “So when we’re down here, I’ve already basically accumulated what I would consider to be one-sixth of what I hope to hold in the longer term.”
His reasoning for this is that:
“If I’m wrong, I don’t want to be sitting here with no Bitcoin, so I’m willing to buy a little bit here (…) and the idea is that, by dollar costs averaging into my full position, I’m able to mitigate the risk of missing the trade while also mitigating the risk if it goes to $9,000.”
This way, the market strategist believes, is “a way of adjusting and handling risk” and I think it’s a really smart investment decision for most people to make, to just inch into positions right now.”
Meanwhile, Bitcoin is changing hands at the price of $16,225, down 1.89% on the day but up 0.32% across the previous seven days. Since the year’s turn, the price of the flagship decentralized finance (DeFi) token has lost 65.38%.
‘Safety of gold’ versus crypto uncertainty
On the other hand, despite believing Bitcoin could drop further, Soloway is very bullish on gold, which has “already had an awesome move” at around $1,728 and broke through. In his view:
“I love the fact that we’re trading above this $1,728 level. As long as that continues, I’m bullish in the near term and the long term on gold. (…) I’ve loved gold all year long. I said it would be the best-performing asset in between the S&P and Bitcoin, and it obviously was for 2022.”
He believes that the same will happen in 2023 “although it’s a little trickier with Bitcoin now because as Bitcoin gets to a low, it’s a little harder to think about. If it bottoms out in June or May of 2023, where is it by December? So it’s a little trickier, but I still would go with the safety of gold with the uncertainty in crypto right now.”
Notably, gold owes its near-term outstanding performance to macro factors such as the possibility of the Federal Reserve tapering down its rate hikes as the economy weakens and the U.S. dollar starts to suffer as a consequence.
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