A report from Morgan Stanley states that the drop of Bitcoin’s price since December is similar to the Nasdaq tech bubble which happened in the 199o’s. According to the report, the only difference between the two is that the Bitcoin rout happened at 15 times the rate at which the tech bubble happened.
On a positive tone, the Morgan reported noted that the 70% reduction in the Bitcoin’s price was not anything out of the ordinary. According to the report what’s more is that corrections have historically followed such rallies. Similar to Nasdaq which has recovered the losses it underwent in the 90s Bitcoin could be set for a very strong recovery.
In other news, a research firm believes that cryptocurrencies are especially Bitcoin may have found their bottom already. The company Fundstrat which is based in New York issued a statement indicating that even though the currently the price of cryptocurrencies may be low the pain may already be over. According to the Fundstrat research, the general periods of cryptocurrency consolidation are between 70 days to 231 days. Looking at Bitcoins movement, it hit its all times high in December about 70 days ago. Looking at this estimates then the market bear can end anytime between now and August.
Elsewhere Lee writes has advised investors to stick with large-cap digital currencies like Bitcoin, Ripple, and Ethereum.
Bitcoin’s price as compared to the 2011 cycle
The comparison between Nasdaq and Bitcoin may be helpful but the argument would be better if it was a comparison of the previous cycle with a previous cycle of Bitcoin. A good example is the June 2011 situation when Bitcoin reached its peak of $30, and five months later it went as low as $2. It then took more than a year to reach its previous peak. This may like a long time ago but the same situation repeated itself in 2017 and the currency cycle. It may take some time to recover but Bitcoin will surely recover.