Bitcoin to recover in 'two to three years,' while stocks to stay low for several years - Gareth Soloway
NEW YORK (June 22) As cryptocurrencies continue their descent, Gareth Soloway, Chief Market Strategist at InTheMoneyStocks.com, joined David Lin, Anchor and Producer at Kitco News, to discuss whether Bitcoin will continue to fall. Soloway also took viewer-submitted questions about Bitcoin, stocks, and gold.
As of this writing, Bitcoin was trading around $21,000, and had recovered somewhat from its collapse last week.
Bitcoin to $10K?
Soloway, who last year had predicted a fall in Bitcoin's price from $65K to $20K, said that his "bearish" views had their detractors. However, his forecast appears to be vindicated.
"Price is always king, charts are always truth" he said. "The bottom line is, when you have everyone calling for a low [price] of $20K, you have a lot of people putting stops just under $20K, and it's the tendency of a market to run those stops, make people freak out, make the weak hands exit, and then you finally get a short-term bottom."
Soloway went on to explain, through charts and technical analysis, that $20K is Bitcoin's short-term price floor, and that he expects a bounce back to $25K to $30K in the next "three to six weeks."
However, Soloway was not optimistic that Bitcoin would stay at that level.
"I still see more downside" he said. "I still think that we will head down to $12K, which is my second price target on the downside." He added that he sees the "next six months" being the hardest for Bitcoin, and that a price below $10K is "very possible."
On the upside, Soloway said that in "two to three years" he sees Bitcoin going back up to $65K as the Federal Reserve fails to fight persistently high inflation.
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Stocks to stay low
Soloway does not predict that the stock market will recover, from its recent sell-offs, for several years.
"My fear is that with inflation being stubbornly high for a period of time, it's not going to allow the Fed to significantly print [money to save the markets]" he said.
He explained that the only reason that stocks had recovered so quickly after their 2008 collapse, and the sell-offs due to COVID lockdowns, is because of loose monetary policy. However, the Federal Reserve will be constrained in its ability to engage in such policy in the future, according to Soloway.
KITCO
