The ongoing crypto market volatility has pushed analysts to alter their stance on the prospects of Bitcoin (BTC) as the asset continues to show signs of further correction. Although some analysts project the asset will rally, a section of the market predicts a continued bearish momentum for the flagship cryptocurrency.
In particular, Michael Purves, CEO of Tallbacken Capital Advisors, has extended his bearish stand on Bitcoin, noting that the asset’s long-term momentum has started to become shaky, he said during an interview with Bloomberg Technology on August 30.
According to Purves, his stance is not guided by the asset’s fundamentals,but the fading long-term momentum puts Bitcoin’s next projection at $15,000.
“What really got me bearish was really, again, nothing to do with a fundamentally bearish view or a fundamentally bull view. It was simply the fact that longer-term momentum was really starting to break in in late January, and this one particular signal I was focused on it had done this three times prior, and each time, Bitcoin corrected 60% to 70% over the next, anywhere from four to sort of ten month period,” said Purves.
Bitcoin’s inability to show uncorrelation with equities
Notably, the analyst stated that Bitcoin has since lost its stability, especially with the correlation to the equities market. He started the correlation that emerged with the entry of institutions into the sector.
However, based on the current market conditions, Purves questioned the ability of institutions to retain their position in Bitcoin.
“It shares a reasonably high correlation with the NASDAQ or the broad other risk assets. I question, since it hasn’t demonstrated his ability to be uncorrelated, I question whether institutions are going to come in,” he added.
With Bitcoin proponents maintaining that the asset will grow to become a hedge against inflation, Purves suggested that the asset has not demonstrated this ability. In this line, he added that it’s another reason institutions are likely to stay away from the asset.
Institutions’ interest in Bitcoin
Despite the analyst questioning institutions’ ability to remain in the market, different entities view the correction as an opportunity to invest.
As reported by Finbold, the Venture Capital (VC) firm Seven Seven Six, founded by Reddit co-founder Alexis Ohanian is planning to make its first direct entry into the crypto space, aiming to raise a $177.6 million fund. The firm plans to take advantage of the depressed prices to accumulate different assets.
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Watch the full interview below: