Bitcoin is truly a unique asset. It is currently extending gains on the news of its possible sharp collapse. Apparently, the number one cryptocurrency is so firm that it may even benefit from negative news.
This time, the negative forecast was given by Jeffrey Gundlach. He is sometimes referred to as the 'Bond King'. "Right now, the chart on bitcoin looks pretty scary. It’s dropped a lot from $60,000 down to around $31,500, and it looks like a massive head-and-shoulders top," he said. Gundlach believes that bitcoin will soon plunge to $23,000. However, crypto bulls practically ignored this statement, pushing BTC to $38,000. Nevertheless, there is a grain of truth in his words. A head-and-shoulders formation is when an asset takes the shape of three peaks on the chart and this pattern has recently appeared on the chart. Then, the neckline will be around $29,000. If the price drops deeper, BTC may resume the downward movement.
“I’m not a big believer in head-and-shoulders tops but this one looks pretty convincing. Turning neutral at $23,000 was obviously too early, but I’ve got a feeling you’re going to be able to buy it below $23,000 again," Jeffrey Gundlach pointed out. "I've never been long bitcoin personally, I've never been short bitcoin, it's just not for me. I don't have that kind of risk tolerance in my DNA where I have to get worried to pull up the quote every day to see if it's down 20%," he added.
Notably, Jeffrey Gundlach is not the only one who expects the next downward cycle of BTC. In late June, JPMorgan made a similar forecast. Analysts argued that BTC may fall to $25,000. The six-month lock-up period expires in June and July. So, investors are likely to sell at least some of their Grayscale Bitcoin Trust shares. Grayscale Bitcoin Trust is the largest crypto fund that has a deferred repayment mechanism. GBTC owners cannot sell their digital assets earlier than six months. According to the Bybt service, about 40,000 bitcoins purchased in January will be unlocked in July.
