Wall Street veteran explains bearish outlook for Bitcoin

Bitcoin (BTC/USD) is battling downside pressure above $20,000, with recent dips beneath the round figure coming amid widespread selling across risk assets.

Michael Purves, CEO of macro research firm Tallbacken Capital Advisors, thinks the benchmark cryptocurrency will remain bearish for much longer. 

According to him, Bitcoin’s long-term momentum has weakened further and price could retest fresh lows in the $15,000 region or lower.

Bitcoin’s bearish outlook

Explaining his bearish outlook for Bitcoin, Purves told Bloomberg Technology in an interview on Tuesday:

Purves also notes that the technical picture for Bitcoin price shows a bearish signal developing around $42,000 in January.

He also says the declines seen in 2022 have come amid a continuing correlation between Bitcoin and equities. Over the past several months, BTC price has tanked alongside stocks - the latest being last week's sell-off following US Federal Reserve Chairman Jerome Powell's Jackson Hole speech.

The Tallbacken Capital Advisors chief also points out that before the last bull run, Bitcoin’s largely uncorrelated trading with NASDAQ had encouraged institutional investors to buy BTC - looking at the asset as a hedge and store of value.

However, recent lockstep trading with stocks and with Bitcoin not demonstrating an “ability to be uncorrelated,” then it might be difficult for new institutional money to come into the space based on the same “thesis” as before the previous cycle.

“You know if you look at the NASDAQ that that is a pretty clear correlation with rates. And Bitcoin has a pretty clear correlation with the NASDAQ here,” he noted.