Bitcoin Rebounds as Bearish Bets Ease; Bitcoin Bull Repeats $100K Target

© Reuters.

By Yasin Ebrahim – rebounded Monday following a rout over weekend as bearish bets against the popular crypto eased, prompting one crypto bull to repeat a bold claim that BTC would top $100,000 by year end.

rose 17%, to $38,155, rebounding from a low of $31,192 seen Sunday.

“[E]ven though bitcoin is in the penalty box now, I still think you can exit the year over $100,000 ,” said Tom Lee, co-founder and managing partner at Fundstrat Global, in an interview with CNBC.

Traders who had made bearish bets against bitcoin had covered their positions, helping alleviate pressure on cryptos, paving the way for the rebound. “A lot of them covered. I think that’s why crypto is levitating this week,” Lee added.

The recent rout in bitcoin will go down in history as one of the ugliest selloffs in crypto, eclipsing “all previous capitulation events, including March 2020, Nov 2018 and the sell-off that ended the last bull market in Jan-Feb 2018,” Glassnode, an on-chain data analytics firm, wrote Monday in a note.

Most of the data for the crypto bloodbath pointed fingers at newer traders, who were forced to panic sell – after buying near the recent top using leverage – in the wake of souring sentiment on bitcoin following bearish tweets from Tesla (NASDAQ:) chief executive Elon Musk and tighten crypto restrictions in China.

“I think when you look at where the selling is taking place, it’s not from an original holders of bitcoin, but it’s a lot of new accounts,” Lee said.

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The selloff has, however, triggered a deleveraging that in the long-run is expected to be healthy for bitcoin and the wider crypto market.

Open interest across all futures markets has slumped by 60% from the peak and now returned to levels last seen in February 2021, Glassnode added.

The negative commentary on cryptocurrencies including bitcoin have has not let up. Bank of England Governor Andrew Bailey warned Monday that there is a danger of “getting carried away” with financial innovation. “I’m skeptical about crypto assets frankly because they are dangerous and there’s a huge enthusiasm.”

This is not the first time Bailey has forced concern about owing cryptocurrencies. Early this month the BoE chief said cryptocurrencies have no intrinsic value.

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