Experts believe that the Bitcoin rally is FOMO-driven and is slowly starting to unravel.
The rise of Bitcoin, the most voluminous coin of the cryptocurrency market, which started in late 2023, seems to have lost momentum. Experts suggest that the possible decline could reach 50 percent.
According to the information compiled by Borsagundem.com, Mizuho Securities analyst Dan Dolev says the price could fall by half as the FOMO-backed Bitcoin rally begins to unravel.
Return to 30 thousand dollars
"Bitcoin's price is moving higher on investor fears of missing out on the rally, and with excitement waning, the cryptocurrency's price could fall back to near $30,000," Dolev said, as reported by Insider's Jennifer Sor.
Dolev warns investors not to buy on Bitcoin's recent rise. The price of the cryptocurrency market's most voluminous coin has reached record highs, up 48 percent since the beginning of the year. The reason for his warning is that interest in crypto is about to wane, Dolev said, warning investors that this could cause the price to fall as low as $30,000. Dolev implies that Bitcoin could lose more than 50 percent from current levels around $62,500.
FOMO as a catalyst for the rise
Dolev adds that the Bitcoin price could fall as low as $20,000 at the end of the next 'ice age' for crypto. This would represent a 70 percent drop from current levels.
"It's doing well right now but I still think there's no long-term return support, the catalyst for the rise is basically just FOMO and I think it will eventually fall. I think eventually it's going to come out that there's nothing really valuable in Bitcoin," Dolev said: "I personally don't see any value in it, so it could probably easily go back to the 40k or 30k levels."
ETF and halving
Bitcoin has rallied further in recent months on the back of enthusiasm and demand from nearly a dozen spot Bitcoin ETFs approved in January, as well as the cryptocurrency's next 'halving' event and the prospect of a Fed rate cut this year.
But expectations of a Fed rate cut have been significantly pushed back by warmer-than-expected inflation pressures, meaning central bankers appear poised to keep interest rates higher for longer to combat inflation. According to the CME FedWatch tool, markets are currently pricing in an 84 percent chance that the Fed will only deliver two or fewer rate cuts this year.
Decline by 9 percent
Dolev's forecast contradicts those of Bitcoin bulls, who say the cryptocurrency has more room for upside this year. Bernstein analysts suggest that the recent rally of the market's most voluminous cryptocurrency could take Bitcoin as high as $150,000 by mid-2025. This would mean that Bitcoin would experience an increase of over 130 percent from current levels.
