Bitcoin (BTC-USD) backers are doubling down on their predictions of new all-time highs for the world’s largest cryptocurrency after shaking off a rout that sent the digital asset tumbling as much as 20% between Sunday and Monday.
After crashing over the weekend to below $50,000 — a low not seen since February — bitcoin’s price has regained roughly $6,000, putting it down 14% for the last seven days.
As the dust settles on the worst week for bitcoin since the collapse of the FTX cryptocurrency exchange in 2022, bulls said they still expect another leg in a rally that would put the cryptocurrency above $100,000 by the end of 2024. It set an all-time high of $74,000 last March.
The case for it to make new all-time highs in 2024 “is still very much in play,” Martin Leinweber, director of digital asset research at MarketVector, told Yahoo Finance.
If we can regain the old highs around $72,000, I think it’s not unrealistic to see bitcoin between $80K and $100K.
Another bull — Onramp Bitcoin head of macro strategy Mark Connors — said Tuesday that a prediction he made in March that bitcoin will hit $110,000 in 2024 remains unchanged.
Bitwise Asset Management chief investment officer Matt Hougan also predicted new all-time highs later this year following the pullback earlier this week.
“We’re seeing that bitcoin investors are long-term investors,” Hougan told Yahoo Finance Monday. “They’re not, sort of, paper hands that are folding.”
Amid all of this optimism are some renewed questions about whether the largest cryptocurrency is still performing as its supporters have touted.
On Monday, skeptics were quick to sound the alarm on whether bitcoin is, in fact, a safe haven or uncorrelated asset — a refrain that backers and even BlackRock CEO Larry Fink like to tout.
Such a correction, in exaggerated lockstep with technology stocks, would appear to prove the opposite.
“Bitcoin is still a risk asset,” said Leinweber. “It’s not the same kind of store of value as gold. It’s still the smaller cousin because it’s lacking the track record and institutional buy-in.”
Leinweber and others also pointed out that because bitcoin trades 24/7, it’s often sold first during market-wide drawdowns.
Bitcoin’s price declines over the last week appear to be tied to a cross-market unwinding of trades related to the US dollar’s relative strength to the Japanese yen.
With such levered bets gone, several firms said they will be paying closer attention to flows in and out of a series of new bitcoin exchange-traded funds overseen by large Wall Street money managers.
On Monday US bitcoin ETFs saw net outflows of $168 million while volumes exceeded $5.2 billion, doubled compared to the previous day, according to preliminary estimates from JPMorgan.
“Traders will be more cautious now that they’ve burned their fingers, so it’s more an investor’s market going forward,” MarketVector’s Leinweber said.
Fundstrat Global Advisors’ digital asset group said in a note Monday that it is keeping its prediction for bitcoin to reach $126,000 in 2024 and it does not see the recent drawdown as crypto’s “market top.”
Bitcoin’s double-digit decline in recent days is “really just a drop in the bucket,” Mark Newton, head of technical strategy with Fundstrat, told Yahoo Finance.
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.
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