Battered Bitcoin Devotees Begin to Contemplate a Market Bottom
A buzz is building in crypto-investor circles and on Twitter about Bitcoin's stealth July rally, which has beleaguered investors starting to ponder whether the largest digital asset has found a bottom.
Yet, given how intense the boom-and-bust cycles can be in the sector, many are also remaining cautious, unwilling to provide an all-clear sign given the mercurial nature of digital tokens -- even as they see signs emerging of Bitcoin having found a floor.
That's because it's happened plenty of times before -- the coin posts a monster surge that in hindsight turns out to have been nothing but a bear-market bounce. And making such a call might be even more arduous right now considering that digital assets have all year traded in tandem with US stocks, where there are lots of disagreements among strategists over whether the worst of the selling is over.
It's difficult to call a bottom, even more so “with this one, because its rally was fueled so much by young people who had never invested in anything before,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Crypto is a liquidity asset right now, so as long as the Fed is tightening, it's going to be hard for it to see a sustained rally. Second, the asset class has lost a lot of confidence with investors, so it's going to take time for it to regain that confidence.”
Bitcoin has added roughly 15% over the past month through Friday, while other tokens, including Ether, have posted even better returns. Shawn Cruz, head trading strategist at TD Ameritrade, says there will need to be a shift in risk appetite before the coin can start to move significantly higher.
Bitcoin “could probably tread water here for a little bit,” Cruz said. “It's a matter of waiting for risk
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