Some high-profile investors have taken the recent market downturn as an opportunity to add to their crypto positions, though others warn there’s still a risk of worse to come.
Some of the highest-profile investors in crypto believe that a crypto market bottom is fast approaching and the timing is right to buy — although one still warns of catastrophic outcomes should prices fall below established support levels.
Billionaire Mike Novogratz, founder, chairman and CEO of digital asset merchant bank Galaxy Digital Holdings, told a Morgan Stanley conference on Monday that cryptocurrencies may be close to a bottom, with Ether (ETH) likely to hold at $1,000 and Bitcoin (BTC) at around $20,000 to $21,000.
The bottom for crypto would be realized faster than that of United States stocks, which could fall a further 15% to 20%, he said:
4/
If these levels break, $20k $BTC & $1k $ETH, we can expect massive sell pressure in the spot markets as dealers hedge themselves. We can also expect that there will be some otc dealers and that will be unable to hedge properly and might go belly up.
— Arthur Hayes (@CryptoHayes) June 14, 2022
Pal, Scaramucci loading up
Macro investor Raoul Pal is taking the recent market downturn as an opportunity to add to his crypto positions. On Tuesday, Pal told his 956,000 Twitter followers that “we are in a buy zone” for Bitcoin, adding he was getting ready to “significantly” add to his crypto positions “probably starting next week and into July.”
The former Goldman Sachs executive explained that the imminent Bitcoin bottom can also be signaled by the weekly Relative Strength Index (RSI), which is at 31, edging closer to its lowest ever at 28.
With the weekly RSI at 31 and the lowest ever at 28, that too suggests the low is within striking distance. Don't ever expect to nail the low however…
DeMark weekly charts suggest low is next week or in next 5 weeks. pic.twitter.com/rwtfFxjYzH
— Raoul Pal (@RaoulGMI) June 14, 2022
RSI is a metric used by investors to measure the speed and magnitude of price changes, which can indicate overbought or oversold conditions. According to Investopedia, an RSI reading of 30 or below indicates an oversold and undervalued condition.
Pal said his framework frequently expects 60% drawdowns over the long-term time horizons, adding:
Bitcoin Fear and Greed Index is 8. Extreme Fear
Current price: $21,598 pic.twitter.com/lsbousUzeV— Bitcoin Fear and Greed Index (@BitcoinFear) June 14, 2022
Bitcoin is currently priced at $22,061 and ETH is at $1,215 at the time of writing.
