Volatility expected as Bitcoin nears $100k: OKX CMO

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As a seasoned analyst with over two decades of experience in global financial markets under my belt, I find Haider Rafique’s analysis to be well-informed and insightful. His understanding of market dynamics, particularly as they apply to Bitcoin, is impressive. The concept of “dual-sided pressure” he presents is a nuanced take on the current market situation that many might overlook.

Haider Rafique, OKX’s Global Chief Marketing Officer, has issued a caution about increased market fluctuations as Bitcoin nears the $100,000 price point.

Last week, Bitcoin (BTC) almost reached the $100,000 threshold but failed to break through the significant resistance level. Currently, it’s trading at about $93,428. According to Rafique, who spoke to crypto.news, this decline was due to “selling by individuals looking to secure profits” among Bitcoin holders.

As per an OKX executive’s statement, investors who bought Bitcoin when it was around $30,000 are now seeing returns that are nearly double or triple their original investment at the current prices. This significant gain has made $100,000 a significant selling point for these investors looking to cash in on their profits.

Concurrently, substantial selling from profit-makers is being offset by robust buying activity.

Rafique pointed out that organizations such as MicroStrategy, who persistently buy Bitcoin, are decreasing the amount of Bitcoin available for trading on exchanges, thereby increasing the demand and potentially driving up the price.

In simpler terms, Rafique stated that the existing balance of long and short positions shows a slight pessimism, with more bets on Bitcoin decreasing (short positions) than increasing (long positions). He warned that this situation could be unstable. Additionally, as Bitcoin inches towards $100,000, Rafique anticipates a situation where both upward and downward pressures might build up simultaneously.

One side anticipates that long-term investors might choose to cash in their profits, which could increase supply and potentially lower Bitcoin’s price (selling pressure). Conversely, over-leveraged short positions could be forced to close if Bitcoin surpasses crucial milestones, leading to a flurry of buy orders as traders scramble to cover these positions (buying pressure due to liquidations).

Rafique emphasized that this mix could lead to increased market turbulence, capable of causing quick changes in prices, whether upward or downward.

In contrast, he pointed out that temporary drops might occur, but they probably won’t persist for an extended period or cause significant fear among investors. On the contrary, Rafique proposed that such declines may offer appealing chances for potential buyers to invest in the market.

In case of temporary declines, these drops might be viewed as excellent chances to buy instead of causing widespread selling panic. By examining Bitcoin’s past trends, we can see that when it reached the $50K mark, there was such strong purchasing interest that it swiftly rebounded to around $60K.

Many financial experts believe it’s important to note that Bitcoin might experience price adjustments while aiming for the six-digit mark, given its current trajectory.

In a post dated November 26th on CryptoQuant, its CEO Ki Young Ju highlighted that during intense bull markets, drops of around 30% are not unusual. He drew attention to Bitcoin’s behavior in 2021, where it rose from $17,000 to $64,000, even after experiencing several significant corrections.

Ju suggested investors should handle risks carefully and resist “selling in a panic during temporary low points,” emphasizing that the market is still in an upward trend, or simply put, it’s still a bull market.

In a recent investor update, analysts from QCP Capital expressed similar views, characterizing the recent price drops as “not cause for alarm,” and suggesting that Bitcoin was simply “taking a break” following its recent surge in value.

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2024-11-27 14:42