FTX CEO Sam Bankman-Fried argues selling pressure on Bitcoin could rise further
- Sam Bankman-Fried notes a high correlation between Bitcoin and equities, which could increase selling pressure on the asset.
- Traders that follow algorithms consult data trends and predict further drops in Bitcoin price, nearly twice that in the equities market.
- Bitcoin may end halfway between fundamental investors accumulate and others selling their BTC holdings.
The CEO of FTX exchange, Sam Bankman-Fried, commented on the rising geopolitical tension and the impact on cryptocurrency prices. Bitcoin price could plummet with increasing selling pressure on the asset.
Bitcoin could crumble through war and geopolitical crisis
Sam Bankman-Fried shared his thoughts on Bitcoin price in a recent crypto thread. The FTX exchange CEO has noted that the S&P 500 is down, and the rising correlation between stocks and Bitcoin implies an increase in the selling pressure.
Bankman-Fried explains how war leads to panic selling; investors pull capital out of traditional financial markets and cryptocurrencies. The CEO of FTX exchange believes that the Russia-Ukraine war could destabilize Eastern European currencies and financial systems.
The American Entrepreneur believes that traders that follow fundamentals could accumulate Bitcoin through the dip. Traders that follow algorithms would expect a further drop in Bitcoin price.
Historically, Bitcoin has acted as a hedge against inflation. However, the correlation between Bitcoin and equities has increased since the last halving, which could negatively influence the price of the asset.
The algorithmic investor could increase the selling pressure on Bitcoin and wipe out billions from the crypto market capitalization. Therefore, the CEO of FTX concludes that the recent drop in Bitcoin price is not the real effect of change in monetary policy.
11) There's a push and a pull, with fundamental investors buying and algorithmic investors selling; on net, BTC ends up halfway in between, down 8% on the day.
— SBF (@SBF_FTX) February 24, 2022
So, who's "right"?
FXStreet analysts have evaluated the Bitcoin price trend and predicted that bulls are desperate to find support, and failure could push the asset below $30,000.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
