Analyst Warns of Bitcoin's Potential Rebound After Deeper Drop

Despite the cautious sentiment, there is a belief that a recovery may be imminent, especially if Bitcoin continues to follow the trends in the U.S. stock markets. Christopher Bendiksen of CoinShares compared Bitcoin's current behavior to its significant movement during the 2020 COVID-19 crash, where it dropped over 50% before quickly rebounding. Bendiksen suggests that Bitcoin's price typically lags changes in global M2 money supply by approximately three months, indicating the possibility of a further decline to $60,000 or below before stabilizing. He also noted that Bitcoin's high liquidity makes it more reactive to economic shocks initially, but historically it stabilizes quickly once the market adjusts, as seen in 2020. Looking forward, Bendiksen believes that factors like potential monetary easing by the Federal Reserve and expansionary policies could trigger a strong upward trend, but warned of a prolonged downturn if supportive conditions do not materialize.