Fundstrat Advisor Suggests Caution with Bitcoin


A major advisor on global finance is projecting some possible pain for Bitcoin holders who have already seen huge decreases in their assets.

As Bitcoin slumps down significantly under the $4000 mark for the first time in many months, Bloomberg is reporting on comments from Robert Sluymer of Fundstrat Global Advisors who suggests that technical indicators show Bitcoin might have further to fall.

“The price structure for most cryptocurrencies remains weak and appears vulnerable to a pending breakdown to lower lows,” Sluymer told Bloomberg. “Fundstrat’s advance/decline indicator, which measures market breath for 250 small-cap cryptocurrencies, “is at risk of breaking to new lows.”

Noting this trend, a Bloomberg graph also cites a large cap advance-decline line for FS Crypto FX 10 and a mid-cap advance decline line for FS Crypto FX 40.

The Bloomberg article also mentions how some reporters believe that it now costs more to create a Bitcoin (over $4000) than what that Bitcoin is valued on in the market right now (under $3400). That critical mass will surely lead to miners jumping off the ship and selling off their equipment.

But another interesting bit from this article addresses some of the people who have been most bullish on bitcoin in the past. Fun Strat cofounder Tim Lee has been quoted as saying that Bitcoin has a lot of leash to increase its value – just a year ago, Lee was saying that Bitcoin could reach $125,000 by 2025.

The reporting now shows that Lee is tired of giving these rosy projections in today’s current environment – and that’s an interesting thing. He is by no means the only one put in that position, but traders can think about how that works. Lee and others may very well expect Bitcoin to rise in the future, but they understand the impracticality of trying to impress that on people at a time when Bitcoin is circling the drain quite steadily.

In other words, some of the true “do or die” Bitcoin enthusiasts believe that there must be a catalytic event to really jumpstart Bitcoin again. Obviously, that hasn’t happened yet.

Take Jack McAfee, the security mogul who has posited Bitcoin at over $1 million. McAfee is relatively quiet right now, but that would probably change if the value of Bitcoin started to spiral toward, say, $10,000.

Another way to look at this is that although long-term holders over the past two years have suffered enormous losses, that has led to an entry point commonly known in investor parlance as a “fire sale” for equities or commodities. Bitcoin value is in some people’s eyes just about as low as it can go without dropping the cryptocurrency into penny stock territory, and so some traders might be quietly and cautiously considering whether to get on board.

Nonetheless, it doesn’t seem prudent to ignore these short-term warnings that $3400 might not be the bottom for Bitcoin right now. Take a look over the next week and try to form your own projections based on changing trend lines and whether or not Bitcoin breaks either way tomorrow.