Gareth Soloway, the chief market strategist at InTheMoneyStocks.com, has suggested that Bitcoin (BTC) will likely correct further as the flagship cryptocurrency continues to battle the macroeconomic environment.
According to Soloway, Bitcoin is facing a ‘worst case scenario’ of correcting towards $3,500, noting that if the level is achieved, the cryptocurrency’s growth will likely mirror the Amazon (NASDAQ: AMZN) stock during the Dot-com bubble, he said during an interview with Kitco News on October 12.
In the meantime, Soloway pointed out that Bitcoin might bottom in a year before rallying again, noting that the cryptocurrency, alongside gold, will likely outperform.
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“There will be a pivot in Bitcoin as it matures as regulation helps people feel more confident. <…> I think in the near term we’re going to see a little bit of a bounce then a wave down to $12,000 to $13,000, and then I do worry that you’re going sub $10,000 to $8,000 maybe even worst case scenario $3,500 very small percentage but that would be the equivalent of Amazon.com collapse in the dot com era,” said Soloway.
Bitcoin’s divergence from stocks
He noted that as Bitcoin matures, it will likely be treated as gold with the asset decoupling from stock. The analysts also cautioned the divergence from stocks would not come anytime soon.
Soloway added that central to Bitcoin’s future growth away from the prevailing macroeconomic factors would be confidence from institutions to get involved in the space. However, he believes institutional input relies heavily on the regulatory framework because it brings a sense of comfort among investors.
The dollar’s impact on Bitcoin
As reported by Finbold, Soloway projected that Bitcoin was in line of correcting towards $12,000, citing the dollar impact. In his view, the extended strong dollar performance can kill all risk assets like Bitcoin.
Elsewhere, Bitcoin has recorded minor gains after tanking in the wake of U.S. inflation data. By press time, the asset had regained the $19,000 spot, trading at $19,600 with gains of 3% in the last 24 hours.
Watch the full interview below:
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