Nicholas Merten, a veteran crypto analyst, recently sounded a warning about a potential substantial contraction in Bitcoin (BTC) total market capitalization together with other cryptocurrencies.
In a new strategy session, Merten forecasted that the crypto market could be on the verge of shedding off a massive $440 billion in valuation, which would heavily impact the Bitcoin (BTC) market outlook.
Possible Implication Of The Bearish Prediction
According to Merten, the $440 billion could plunge the crypto market capitalization to around $650 billion. Merten noted that the number one crypto asset could decline by 43% and eventually find support between $15,000 and $16,000.
Merten remarked, “The best-case scenario here for those who’ve already positioned themselves is that we’re going to find support prior lows at around the $650 billion market cap range or for Bitcoin likely around that $15,000-$16,000 range.”
Describing what could stage the potential decline in the crypto market valuation, Merten noted that it could be due to the unyielding approach of the Federal Reserve, which has resulted in a decrease in liquidity, leaving a negative impact on the performance of top tech firms like Microsoft Corporation MSFT and Apple Inc. AAPL.
These were his exact statements as he kept on asking some rhetorical questions that made sense, “if these stocks, these multi-trillion dollar assets, are moving lower, bond yields are going up, the dollar is becoming more scarce, what do you think this is going to do to crypto in a world of increased uncertainty and volatility? Are people really going to be rushing to Bitcoin?”
Meanwhile, despite acknowledging Bitcoin’s appeal due to events like the halving coupled with Bitcoin’s cap supply, Merten still maintained that Bitcoin’s boom remains associated with phases when funds seemed to be pumped into the crypto market rather than when it appears to be losing monetarily.
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Bitcoin In The Accumulation Phase
Per a previous report, PlanB, a top crypto market analyst, revealed that Bitcoin is currently in the accumulation phase, which he tagged “stage 1” of the four named stages in BTC’s market cycle.
According to the crypto analyst, stage 1 above would precede stage 2, which is the bull market phase, after which phase 3 and phase 4 would play out. Notably, phases 3 and 4 were dubbed the bear market and liquidation phases, respectively.
PlanB noted that the Bitcoin halving, which he anticipates to happen in April 2024, would be the catalyst that could kick start the bullish phase. At the time of writing, Bitcoin is changing hands at $26,127 with a market capitalization of $509,330,981,480.
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