Is Mark Dow closing his BTC short position a sign for a market recovery?
The former IMF economist decided to close his short BTC position exactly one year after the peaking value of Bitcoin. Throughout this period, the Bitcoin suffered a steep decline, with value depreciation of the cryptocurrency of more than 80%.
Mark Dow, who manages a family office in South Caroline, was convinced that Bitcoin value was doomed to experience steep declines immediately after the start of BTC futures trading. In comparison, the all-time high amount of exactly $19,511 in December 2017 has fallen to around $3,200 per BTC this December. Dow, who made profits twice over the run of 2018, stated that he is “saying goodbye” to the short.
According to Dow, the record high price of BTC in 2017 was mostly a result of the lack of knowledge and understanding of the blockchain technology of people that were involved in trading. The euphoria that was created around the increase in the value of BTC was perceived as a profitable opportunity for many people to become BTC holders. In reality, Dow claimed that the bubble had grown larger and much more violent, with much more severe consequences.
The charts for the third week of December, however, suggest that there may be a sign of repetition of the “Christmas fever” scenario from last year, although on a smaller scale.
More than $20 billion were added to the cryptocurrency market during the past three days. ETH was registered to surpass the $100 barrier. EOS is currently leading the gains competition with value increases accounting for 38% in comparison to its value the week before. Litecoin, XRP and BCH are close behind with growths in the range between 20%-25%. Stellar and BTC were reported to be recovering as well, although the improvements are at a lower rate — respectively 3% and 6%. The only digital asset that continues to be marked in red and has a negative growth is Bitcoin SV.
Crypto experts firmly believe that the market could go in either direction, especially when considering the market manipulation and “pump n dump” schemes.
Opposite to the common understanding of the value that institutional investors bring to the market, there are mixed opinions on why this could have a negative impact on the market over the long run.