After a market bull run, healthy price corrections are always expected. Bitcoin is currently undergoing such a drop. According to Celsius CEO, Alex Mashinsky, the chances of the price dropping to $16,000 are very likely.
Mashinsky said that he had been predicting that Bitcoin and many altcoins would achieve all-time highs in 2021 and beyond. However, there will be many price corrections along the way like the one in place today. These corrections will allow savvy investors to accumulate these assets at a discount.
December 2020 was the year Bitcoin broke it’s previous 2017 All Time High of $19,892. After this, the digital asset experienced a surge that saw it become worth more than double this amount in less than two months.
On Jan. 8, Bitcoin was worth almost $42,000, before starting on a downhill trend. At the time of publication, it is worth around $35,800. BTC has however recovered from an earlier price of $30,549, which was close to a 30% price correction.
Mashinsky continued to add that Bitcoin prices would plunge even further than 25%. Sooner or later, accumulated pressure from bears would push for more correction. Therefore, the prices would fall all the way back to $16,000 before the end of the first quarter.
Bitcoin price has seen lightning-like surge in recent weeks. Bull markets are characterized by surges and corrections. Mashinsky said that regardless of the drop and more to come, we will continue saying the same since 2017: that there is nothing better than hodling BTC and earning yield on it. Very few investments have the capacity to deliver the returns of Bitcoin over 1,3 and 5 years. The correction process will flash the weak hands and transfer the baton with all their BTC from the short-term speculators to the long-term institutions and hodlers.
The current Bitcoin bull run is also associated with a number of economic factors such as money printing and possible inflation. The massive money printing by national governments is said to have triggered many institutions to invest in BTC, whose supply and circulation cannot be influenced or tampered with.
Bitcoin is however not the only asset experiencing a drop. The classic inflation hedge, gold, also recorded a one-month low of $1,817 on Monday.
If Bitcoin was to fall back to $16,000, many altcoins would also fall while a vast majority would disappear as their current rise in price is as a domino effect on Bitcoin’s surge in price.
Image courtesy of pixabay
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