CoinShares Analyst: "Bitcoin Has COVID-Era Similar Signs! " That said, he gave a good news and a bad news!

Bitcoin continues to retreat to levels not seen since November, while investors remain cautious about further get dumped.

While uncertainty continues regarding the direction of BTC, CoinShares analyst argued that Bitcoin could quickly recover after getting dumped, following the trend of the US stock market.

CoinShares analyst Christopher Bendiksen stated in his blog that Bitcoin could experience a rapid recovery after a sharp get dumped, as it did during the COVID-19 market crash.

The analyst stated that BTC might repeat the 2020 model, which experienced a sharp get dumped and recovery.

The analyst noted that in 2020, BTC fell sharply by more than 50% before experiencing a rapid recovery largely driven by stimulus measures.

Despite the current macroeconomic uncertainty and increased market volatility, the analyst said that a rapid recovery similar to 2020 could be experienced thanks to the possible policy easing by the Fed and pro-liquidity measures under Donald Trump.

Bendiksen also noted that the BTC price experiences approximately a 90-day lag in relation to the global M2 money supply growth. This indicates that there is still more downside risk before a potential recovery, warning that BTC could be sent to $60,000 or lower.

"The current cryptocurrency market is quite similar to the one in 2020. And conditions suggest that Bitcoin could follow the U.S. stock market and then recover quickly.

Bitcoin is a highly liquid asset, and tends to be more volatile in the early stages of a major market turbulence.

But when things go well, they quickly stabilize. We have seen this phenomenon in the past during the COVID-19 crisis.

Bitcoin dropped more than 50% in a short period, but quickly recovered within a few weeks.

The following bull market began with central banks around the world starting to print money, and it took Bitcoin to new heights in 2021.

If Trump's monetary easing policies result as planned, they could set the stage for a fully-fledged bull market. Additionally, since the FED's pivot in 2022, Bitcoin has tended to follow the global M2's (broad money supply) movement with an approximately 90-day lag. If this scenario repeats, an explosive recovery can also be expected. If a low-interest rate and quantitative easing environment similar to 2020 is created, a serious bull market could be experienced.

On the other hand, if my prediction is wrong, we may have already entered a reversal phase that shows a downward trend in the market.

There may be a significant additional drop until demand and price reach equilibrium, and the price of BTC could fall to $60,000 or even lower.”