After Bitcoin’s positive price action this month, Morgan Creek Capital Management’s CEO thinks it’s possible BTC is bracing for a short-term pullback.
“We saw this in the lead-up to El Salvador making Bitcoin a legal tender. There was a big run-up and then the day after the announcement, there was a little mini-crash. So I think there’s some risk of that around October 27th when we find out which, if any – and I think it will actually be multiple – of the [BTC exchange-traded funds] are approved.”
Yusko adds that he wouldn’t be surprised if there’s a “little consolidation” in BTC’s short-term future.
“Look, we’re up 40% this month, which is only 15 days old, and we’re up over 110% year-to-date, so a pause that refreshes, given how overbought we are right now, wouldn’t surprise me.”
Yusko also highlights the potential factors that can push the price of Bitcoin higher once the narrative involving the BTC exchange-traded funds (ETF) runs out of steam.
“The next catalysts to your question are seeing increasing adoption [and] seeing increasing numbers of use cases. Those numbers all look really good. The hash rate is something to watch that has come back dramatically since the China ban on the miners.”
The hash rate is a Bitcoin mining metric that measures the processing power of the BTC network. An increased hash rate indicates greater security and higher resistance to network attacks.
The Morgan Creek CEO also mentions the stock-to-flow (S2F) model, which attempts to predict the price of crypto by measuring the amount of new supply entering the market per year compared to the amount of supply already in existence.
“There are a lot of people that think we can hit $100,000 by the end of the year. The stock-to-flow model says we should. And then there’s the speculative nature that price usually blows right through value.”
Bitcoin is trading at $61,949.33 at time of writing, up more than 13% in the past week, according to CoinGecko.
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