Bitcoin (BTC-USD) hovered near $69,000 on Tuesday, as an analyst suggested the cryptocurrency could be nearing a bottom after a recent sell-off.
“We believe crypto markets are in the early stages of their low point after last week’s record capitulation,” Compass Point analyst Ed Engel said in a note Monday evening.
Engel pointed to about $10 billion in realized losses locked in by investors last week, the second-highest total on record since June 2022.
“These mass capitulation events usually occur in the latter stages of a selloff,” he said.
Nonetheless, Engel cautioned that crypto downturns rarely produce V-shaped recoveries, warning that Bitcoin could retest the $60,000 level and potentially drop as low as $55,000.
Learn more about Bitcoin movements and current market action.
The cryptocurrency is down about 45% from its all-time high of $126,000 in October, when forced liquidations and selloffs by large holders sparked the so-called crypto winter.
Selling intensified last week as the token fell just below $61,000 and recorded its worst daily decline since November 2022. Prices rebounded strongly on Friday and have since traded on either side of the $70,000 level.
Ether (ETH) also fell nearly $2,000 on Tuesday, extending its year-to-date losses to around 30%.
On Monday, Bernstein analysts said that “Bitcoin’s downside case is the weakest in its history.”
“The current Bitcoin price action is just a simple crisis of confidence. Nothing is broken, no skeleton will appear,” wrote Gautam Chhugani and his team.
Chhugani expects bitcoin to hit all-time highs again, with a target of $150,000 by the end of the year.
Ines Ferre is a senior economics reporter for Yahoo Finance. Follow her on @ines_ferre.
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