A 35% drop in bitcoin is a "pretty healthy" reset: Anthony Pompliano
Pompliano believes that the price of bitcoin will lateralize and rise in the coming days.
Bitcoin (BTC) has accumulated a correction of nearly 30% from its all-time high of 126,200 dollars, a movement that entrepreneur and investor Anthony Pompliano considers normal within the behavior of the digital asset.
The bitcoiner recalled that "bitcoin has experienced drops of 30% or more on 21 occasions, and 7 of them have been 50% or more." This, in his opinion, demonstrates that long-term investors are accustomed to this level of volatility.
Indeed, the price of bitcoin shows a sustained decline since early November, with brief attempts at recovery. This is reflected in the following chart:
Pompliano attributes part of the selling pressure to investors from Wall Street, who are not accustomed to such marked fluctuations and also face year-end closures and performance evaluations. "New investors are very fearful, and I believe that is putting downward pressure," he warned.
Even so, he dismisses the notion that the current movement, which keeps bitcoin at $86,000, is the beginning of a prolonged bear market.
"A 35% drop from the all-time high is quite a healthy reset," he stated. This, while highlighting that bitcoin's volatility has reduced and that could limit deeper corrections.
He also noted that the Fear and Greed Index marked extreme fear levels a week ago, which is often an indication of temporary bottoms. And he emphasized that, compared to before the drop of BTC, the market shows less leverage.
This scenario coincides with reports showing less leverage and accumulation by large investors, a behavior that, according to analysts cited by CriptoNoticias, suggests the formation of a local bottom.
Pompliano anticipates that the price of BTC could "sideways and then begin to rise in the coming weeks."