It is always interesting to get two entirely different opinions on a topic which divides even the best of friends, especially when they are not about Brexit, and here are two presented by UBS and Adamant Capital over Easter.
Bitcoin Bear or Bull, what’s it to be? Recovery appears to be on the way, but Kevin Dennean, technical analyst at Swiss multinational investment bank and financial services company UBS thinks it won’t fly.
Dennean doesn’t agree with analysts who see Bitcoin’s recent upward movement past USD 5,000 as an illustration of something bigger just around the corner, citing Dow Jones in the Great Depression, the Nikkei in 1989, the Dotcom Boom and Bust, oil in 2008, and China’s recent stock market crash. He argues: “We’re struck by how long it took other asset bubbles to recover their peak levels,” with a reminder that it took the Dow Jones 22 years to come back after the depression years.
“Maybe crypto bull contingents should consider what happens after the bubble, not every bubble that bursts, recovers the old highs,” Dennean, offers with a somewhat sobering reminder of things past.
Not so Adamant Capital’s latest report, simply warning that investors just need to hold their cool and live with a Bitcoin market between a short term range of USD 3,000 and USD 6,500 and then there should be another bull run ahead.
“The current sentiment has recovered from capitulation and the blockchain shows us that Bitcoin HODLers are committing for the long-term again. This is confirmed by our drawdown and volatility analyses,” the report states.
When the report states that “the long term risk-reward ratio for Bitcoin is currently the most favorable of any liquid investment in the world”, hodlers might be looking at holding on just a little bit longer, although a USD 20,000 would be a lot to ask for. Whilst lower prices may still be a reality, although undervalued according to Adamant, the report brings good cheer for adopters. The report concludes:
“Supported by over 10 years of infrastructure development, we believe the stage is set for mass market adoption in the coming five years. In our assessment, during this phase (its “Windows moment”) Bitcoin will become widely recognized as a portfolio hedging instrument and reserve asset, and will begin making significant inroads as a payment network.”
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