According to an expert trader, the crypto market is on the verge of a DotCom-style washout
Many analysts think that the dot-com bubble, which occurred two decades ago, is identical to today’s bitcoin market.
InTheMoneyStocks.com’s chief market strategist Gareth Soloway is one of many who have drawn parallels between the present crypto market and the dot-com period, predicting that it would experience the same kind of washout that the dot-com businesses did.
The market is following the same trend as DotCom period firms and is on the verge of experiencing a “washout,” much as those companies did in the late 1990s, the professional trader said in an interview with Heresy Financial on March 23.
“At the moment, there are over 15,000 cryptocurrencies, and none of them are necessary. There has to be a washout period, similar to the dot-com bubble of the late 1990s and early 2000s. From there, I believe you’ll attract the greatest of the breed.”
Although the most prominent cryptocurrencies, like Bitcoin (BTC), have seen recent gains, Soloway cautioned viewers to consider the wider picture: “Do not be fooled, guys. This is a traditional bear flag design.”
He proved this trend by “the large move from $69,000 to $33,000 and then just consolidating in the range between $40,000 and $47,000.”
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Despite the bear flag pattern, he voiced hope for the crypto industry’s top players in the long term. In response to the host’s question on his future vision for Bitcoin, he said that:
“I’m really bullish. (…) I believe it will be between $50,000 and $1 million. I believe you must first flush out all the nonsense. (…) It’s quite Darwinian in that sense, with the fittest surviving, and there’s no question that Bitcoin has developed into the strongest currency on which the majority of large money is betting.”
To illustrate his argument, Soloway compared Bitcoin’s price changes since early 2021 to Amazon’s (NASDAQ: AMZN) chart from the late 1990s to the early 2000s, which clearly demonstrates the e-commerce giant’s “bubble and bust” pattern.
“As you can see, the trend is very similar to that of Bitcoin – a large rise up, a large correction, and another large advance up, erasing the high, as Bitcoin did in November 2021. Then consider the crash, which saw Amazon go from $112 to $6. If it occurs with Bitcoin, I believe the price goal might be $4000.”
Following the “do-not-lose-hope” phase, the most successful dot-com era enterprises began a fast upward trajectory, which he expects will happen to Bitcoin as well.
As Finbold wrote, Soloway has previously articulated similar beliefs, repeatedly reiterating them, as he did in the latest interview.
By press time, the price of Bitcoin had risen to $42,213, a 4.57 percent gain from the previous seven days’ low of $40,370.
The popular cryptocurrency’s price has decreased somewhat during the past 24 hours, trading 1.37 percent lower than the previous day, according to CoinMarketCap statistics.
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