Watch $28,000 in Bitcoin – Morgan Stanley
2022.05.11 17:12
Watch $28,000 in Bitcoin (BTC) – Morgan Stanley
Morgan Stanley strategist Sheena Shah reflected on Bitcoin (BTC) and the cryptocurrency market amid an ongoing selloff that pushed the former below the $30,000 mark again.
Bitcoin attempted to stage a recovery earlier this morning but the bulls were rejected at $32,150. Another hot set of inflation numbers has staged an intraday reversal that pushed BTC price lower to $29,011 – a new 11-month low for the world’s largest digital asset.
“Parts of the crypto market that were more popular recently, amidst the bear market, have also been weakening, a sign that leverage is falling and demand is poor. $28k is a technical level to watch for Bitcoin to the downside, as this is where anyone who bought in the past year would incur a loss,” Shah said in a client note.
The strategist continues to expect a high positive correlation between the equity market risk sentiment and cryptocurrencies. Shah also noted that retail investors don’t seem to be the dominant crypto trader anymore.
“The largest proportion of daily crypto trading volumes is from crypto institutions, much of which comes from them trading with each other. For example exchanges, custodians, and crypto funds. Retail traders were dominant around four years ago, when Bitcoin traded below $10k. We think the increased involvement of institutions, which are sensitive to availability of capital and therefore interest rates, has contributed in part to the high correlation between Bitcoin and equities,” she added.
Finally, Shah also doesn’t expect the increased volatility to fall “any time soon.”
“When Bitcoin falls, most other cryptocurrencies also fall, highlighting very little differentiation by investors.”
As of 09:22 EST, Bitcoin price is down 3.5% on the day.
By Senad Karaahmetovic
