Crypto analyst Nicholas Merten, known for his timely warnings, has warned that Bitcoin (BTC) could collapse due to various factors, including a possible recession. Here is the analyst’s doomsday prediction for Bitcoin.
Prediction of a Major Drop Exceeding 60% in Bitcoin
Nicholas Merten, the host of DataDash, said in his recent strategy session that Bitcoin could drop by about 63% from its current value after entering a descending consolidation channel in 2021. Merten stated the following in his warning:
“What we need to consider here is the idea that we could potentially drop even lower, down to around $10,000. I know it sounds crazy.”
According to Merten, two factors that could trigger the collapse of BTC are the further decrease in market liquidity due to the hawkishness of the Federal Reserve (Fed) and a possible recession:
Bitcoin has never experienced a recession before, but the unfortunate reality here is that liquidity is quite low in this market. Therefore, you should be modest in your expectations.
This could be a bearish scenario, but it is also a fundamental scenario based on the fact that liquidity is decreasing at least.
“It’s Not Possible for BTC to Reach All-Time Highs in the Short and Medium Term”
Furthermore, Merten also warned that it is not possible for BTC to reach new all-time highs in the short and medium term due to the macroeconomic environment that would support such a record-breaking rise:
While Bitcoin has shown exceptional performance in the last decade from 2010 to 2021, this strong performance was primarily due to the high liquidity provided by the Federal Reserve and central bank interventions that have a much greater impact than the halving of block rewards.
Considering the demographic decline and changing macro factors that may require the Fed to intervene at times, it does not seem possible for us to return to that environment. They probably won’t intervene as aggressively as they do now to lower inflation to the target level and keep it there.
