‘Wolf of All Streets’ Forecasts Challenging Months Ahead for Crypto

By Aaron Feuerstein January 24, 2024 In Bitcoin, Cryptocurrency, Cryptos, ETF
Source: Adobe Stock
  • Amid a market downturn, the crypto market is experiencing growing fear, and analyst Scott Melker predicts a challenging 6-8 months ahead.
  • David Duong, head of research at Coinbase, suggests that Bitcoin’s floor price might be higher than expected, predicting a significant rebound after a period of supply exhaustion.
  • He highlights the importance of technical aspects and market dynamics over fundamentals in the current economic climate.

Fear Creeps Back Into Crypto Market

Amid the current market downturn there is a lot of fear in the crypto market. Looking at the fear and greed index, we can see the trend at present is declining, which means we are trending more toward fear, despite being still in neutral territory right now. While the index has dropped from 50 yesterday to 48 today, last week was a completely different picture – the index showed greed (60) last week and a whopping 73 last month, before the Spot Bitcoin ETF approvals.

Fear & Greed Index, source: alternative.me

So, will we see a reverse soon? Well, not if you ask Scott Melker, The Wolf Of All Streets believes we are in for a rough ride. Melker went to X (formerly Twitter) to tell his almost one million followers that he thinks the next 6-8 months will be a bumpy ride.

Indicators of Market Bottoms

Melker had David Duong, CFA and head of research at Coinbase on a recent show, who suggests that Bitcoin’s floor price is probably higher than some might expect and anticipates a retracement. This retracement is based on his theory of supply exhaustion, where he expects a significant rebound once this point is reached. Duong doesn’t attribute this to people buying ETFs alone, as he believes market dynamics work in both directions.

On the macro side, he observes positive alignments, noting the performance of tech stocks and general economic indicators in the U.S. as signs of a healthy economy. He believes this environment could encourage people to move further down the risk curve.

Source: Scott Melker/ YouTube

Duong emphasises the human element in financial decision-making, noting that choices are based on a limited set of factors, including sentiment, macro views, and perceived wealth. This ‘wealth effect’ is significant in his analysis.

Furthermore, he highlights the importance of understanding the technical aspects over fundamentals in the current context. This includes the mechanics of the ETF market, the interplay between different market segments (like futures, spot market etc.), and how they impact each other. He deems these technicalities currently more crucial than trying to establish correlations between Bitcoin and other assets like tech stocks.

Right now, I think the technicals are probably more important than the fundamentals somewhat because understanding the mechanics […] is probably more important itself then trying to say what is the correlation between Bitcoin and tech stocks. You know, it’s not the key driver at the moment.

David Duong

Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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