After the market’s leading cryptocurrency hit two-year lows due to FTX collapse and Sam Bankman-Fried dramatic fall, cryptocurrency analyst Tone Vays is outlining the long-term bull case for Bitcoin (BTC).
Vays has said that even if Bitcoin drops to about $11,000, it might still achieve a new all-time high of $100,000 next year. The trader thinks that buyers who intend to store Bitcoin for a long time will be drawn to it if it crashes as expected.
“We can have a capitulation down to $11,000 and still hit $100,000 next year. Because a lot of Bitcoin is about to go into cold storage because people can buy it on the cheap.”
According to Vays, if Bitcoin closes this week above the $18,500 support level, it might mean that the leading cryptocurrency asset has bottomed out.
The veteran trader said that funding rates on the cryptocurrency trading platform BitMEX also suggest that, based on historical behavior, a bottom may be in for Bitcoin.
“The last time the funding rate was this low was back in May 2021. Let’s see what happened in May 2021. That was right here [$30,000]. Eventually, off of that, we went to a new all-time high [of $69,000]. So I’ll take these odds. I’ll take the odds that the low is in.”
From the trader’s chart, it can be seen that funding rates are incredibly bearish, which suggests that traders are now building up short positions.
This might prepare the cryptocurrency market for a short squeeze, in which traders who borrow units of an asset at one price with the intention of selling them for a lower price and pocketing the difference are forced to buy the assets back when the trade swings against their bias.
At the time of writing, BTC is trading at $16,850 and is up by less than one percent in the last 24 hours.