15 Mar Fundstrat says regulatory headlines add further bitcoin misery
The bitcoin recovery has been held back by a combination of weak prices and negative regulatory headlines around the globe, according to Fundstrat Global Advisors’ latest newsletter.
The short-term technical picture has worsened writes Technical Analysis Strategist, Rob Sluymer:
“It has been a challenging few weeks for bitcoin as the combination of negative headlines coupled with weak prices have added to further worsening of investor sentiment – when sentiment is this weak, the market is increasingly ‘fire, ready, aim’ – meaning, any headline today is likely to trigger selling.”
Bitcoin trading at mining break-even cost
Sluymer notes bitcoin currently trades at or near the break-even cost of mining a bitcoin, now estimated at $8,038 based on a mining model developed by Fundstrat’s data science team.
He said it would be unusual for bitcoin to trade below break-even mining cost. Bitcoin peaked in late-2013 at $1,151 and a price/break-even point (P/BE) of 34.5X and ultimately bottomed at 1.0X on Jan 4, 2015 after a 90% decline.
Sluymer says “Bitcoin is essentially at the same P/BE multiple it traded at when Bitcoin was $176.50 in 2015.”
Who wouldn’t want to buy in again at that 2015 price point?
Historically, March has been the worst month for bitcoin and it has only risen once in the past seven years in March. Sluymer says, “In the midst of the technical weakness, and the poor seasonals, it is probably not surprising to see sentiment is terrible.”
Bitcoin technical analysis
Sluymer said bitcoin broke through the $9,325 support level on Feb 25 and below the $8,370 support level this week. He said two other support levels to watch are $7,535 and his projected bottom for bitcoin at close to $5,873.
He noted bitcoin seems to see the strongest selling in the 1-hour after the close of NASDAQ Stockholm at 12:30pm ET.
Fundstrat believes bitcoin is still in a bull market “phase” even after a 70% selloff. Sluymer adds, “The 70% decline looks a lot like the 70% decline April 2013-July 2013 which was followed by a monster rally.”
$25K bitcoin by end Dec 2018?
The analyst still sees a strong 2018 with the larger, more established blockchains growing and presenting a better potential upside for Ethereum and bitcoin.
Fundstrat projects an end of year 2018 price for bitcoin of $25K, $1,900 for Ethereum, $60 for Ethereum Classic, $225 for Neo and $30 for Bitcoin Investment Trust.
Cryptocurrency traders are holding on to the guardrails to see if Fundstrat is accurate with its projections.
For more detailed technical analysis, contact Fundstrat directly.
Editor’s note: Information on Blockcoin Today is not intended as investment advice. Please consult your own investment advisors for appropriate guidance and counsel.