Bitcoin’s recent dip below $100,000, its lowest level since June, has sparked concerns among crypto investors. However, two well-known market figures offer a more optimistic view on where Bitcoin could be headed next.
Bitwise chief investment officer Matt Hougan believes the latest downturn reflects peak retail capitulation rather than the start of a deeper collapse. “Crypto retail is in max desperation,” he told CNBC’s Crypto World on Tuesday. “We’ve seen leverage blowouts… the market for sort of crypto native retail is just more depressed than I’ve ever seen it.”
Hougan said there are more and more signs that the sell-off is nearing exhaustion. “When I go out and speak to institutions or financial advisers, they’re still excited to allocate to an asset class that if you pan back and look over the course of a year, is still delivering very strong returns,” he said.
Hougan added that once the retail flush-out ends, institutional demand could push prices higher. “I think Bitcoin could easily end the year at new all-time highs,” he said, citing a potential range of $125,000 to $130,000.
Related: Bitcoin slips below $100K as analysts say BTC is set to drop lower: Here’s why
US debt will force Fed into “stealth QE” — Hayes
Meanwhile, former BitMEX CEO Arthur Hayes pointed to structural liquidity as the key driver of the next rally. In a Nov. 4 essay, he argued that the US government’s growing reliance on debt issuance will ultimately force the Federal Reserve to expand its balance sheet.
He described this as “stealth QE,” where the Fed supplies cash to the financial system through its Standing Repo Facility to support Treasury financing.
QE stands for quantitative easing, a monetary policy employed by central banks to stimulate an economy by purchasing financial assets, such as government bonds, thereby increasing the money supply.
“If the Fed’s balance sheet grows, that is dollar liquidity positive, and ultimately pumps the price of Bitcoin and other cryptos,” Hayes wrote. He believes this cycle of rising government borrowing and quiet liquidity creation will “reignite the Bitcoin bull market.”
Related: Bitcoin finally escapes ‘fear’ as confidence tiptoes back into crypto
Bitcoin enters bear market
In a Tuesday post on X, Mosaic Asset and trading resource The Kobeissi Letter said that Bitcoin (BTC) has officially entered bear market territory after falling more than 20% from its record high on Oct. 6.
Some other traders also warned that crypto prices could extend losses. Investor Ted Pillows said the market was in “free fall,” predicting a potential retest of the $92,000 CME gap if the $100,000 zone fails to hold.
Magazine: Bitcoin OG Kyle Chassé is one strike away from a YouTube permaban
