The leading cryptocurrency is “closer to the bottom than the start of a pullback,” although a move to the lower end of the $70,000-$80,000 range remains possible. This was stated by Bitwise CIO Matt Hougan in an interview with CNBC.
On Friday, November 21, Bitcoin dropped to around $82,000. At the time of writing, the asset is trading near $84,000. Over the week, prices have fallen by more than 12%, and over the month, by 23% (CoinGecko).
Correction as a Good Entry Point
Hougan believes the current sell-off in the asset is due to a clash between short-term fear and long-term confidence. Traders seeking quick profits are reacting to the “global decline in risk appetite, the winding down of DAT trading, and the aftermath of volatility on October 11.”
“But long-term investors are beginning to appreciate this price level,” the expert noted.
According to him, several large institutional entities, such as the Harvard University fund and Abu Dhabi Investment Authority, view Bitcoin’s correction as a potential entry point.
However, Hougan acknowledged that a dip closer to $70,000 is not out of the question. He identified $84,000 as a key resistance level.
“Cryptocurrencies are falling because global liquidity is shrinking. DAT token trading is winding down. A trend towards risk aversion is forming,” he stated.
Ownership Structure as a Foundation of Stability
A similar view was expressed on CNBC by Cantor Fitzgerald’s chief equity and macroeconomic analyst Eric Johnston. He noted that the Bitcoin sell-off reflects a broader cycle of risk reduction, which has also affected the crowded AI market.
“We entered this with leverage in the system. We took a serious hit, significantly reduced risks, and now everything is cleaner,” Johnston emphasized.
The analyst highlighted a significantly altered ownership structure compared to previous downturns as a more important factor for digital gold. Significant volumes of the asset are now held by institutional players, and regulation has become much clearer, he explained.
“This has reduced, although not eliminated, overall volatility,” Johnston believes.
Like Hougan, he did not rule out the continuation of the first cryptocurrency’s correction but also described it as a temporary phenomenon.
As reported in Glassnode, the options market does not indicate a bottom, and traders are inclined to risk further Bitcoin declines below $75,000, according to their findings in Glassnode.