BTIG analysts have issued a warning to Bitcoin (BTC) bears, predicting a strong rally for the cryptocurrency back towards the $100,000 level following a significant pullback experienced this month.
“Following the 36% drop between the peak and the trough, we think Bitcoin is poised for a reflex rally towards at least $100,000,” wrote BTIG analyst Jonathan Krinsky in a note to clients.
Market Context and Pressures
Bitcoin is currently trading at $90,451, showing an increase of almost 10% over the last five days, according to data from Coin Metrics. Despite this recent recovery, the cryptocurrency remains down 20% in the past month. This decline is attributed to a combination of macroeconomic developments and pressures specific to the crypto market.
Growing concerns about the overvaluation of AI stocks have led some investors to reduce their risk appetite, shifting towards safer assets like gold. Additionally, mixed signals from recent US federal economic data are contributing to overall market caution.
Some long-term Bitcoin investors are engaging in profit-taking, driven by the widespread belief that the BTC price is moving in sync with the blockchain's quadrennial programmatic updates, known as the halving cycle. Notwithstanding this selling pressure, BTIG anticipates that Bitcoin will recover some of its losses by the end of the year.
Performance of Crypto Mining Companies
BTIG analysts also highlighted the "impressive performance" of crypto mining companies Cipher Mining and Terawulf, noting their resilience even during the recent downturn. Cipher Mining has seen a 35% increase since the beginning of the week, while Terawulf has gained 31% during the same period. The analysts observed that an index composed of crypto miners is also establishing strong support, with potential for an additional 15% upside before encountering more significant resistance.
Ethereum's Recovery Prospects
Ethereum, the second-largest crypto asset by market capitalization, is also expected to recover towards the $3,400 level. This projection comes despite Ethereum losing 24% of its value last month.