With the persistent downward trend in bitcoin price in the last few days, two prominent traders Brian Stutland and Jim Luorio believe the price of the asset will “bottom out” at $6,000 due to mining cost.
The duo, Brian Stutland, the founder of Stutland Equities and a regular contributor to CNBC Fast Money and other programs and Jim Luorio, a managing director of TJM Institutional Services and a veteran futures and options trader were speaking to CNBC when they mentioned this.
The two traders think the fall will stop at $6,000 because profitable mining can only be sustained at that point and any further decline will make many miners to turn their backs on the cryptocurrency no new ones can afford to venture into the industry.
Stutland was quoted as saying:
“It’s going to be difficult [to profit] once we get down to this $6,000 level I think that’ll act as some support there. But look, do we really need Goldman Sachs? The point of cryptocurrency was to get people out of the banking system, and bank and transactions offline from that.”
The fall in the price of bitcoin has been attributed to news about Goldman Sachs and experts have said it was due to a lack of patronage but whatever the cause, Stutland said bitcoin might experience a bounce when it hits their expected minimum of $6000 despite the sell-off experienced in the last few days because of the fall.
Stutland and Luorio’s perspective may have something to do with the recent acceptance of bitcoin by countries and individuals alike especially its rare mention by a celebrity artist, which may make it more popular and increase the patronage, lack of which experts say led to crash in the first place.
Luorio speaking said bitcoin will rise to $6,800 after going through what he described as a consolidation. On the other hand if it falls below $6,300 then it will definitely go to $6,000.
Since bitcoin is trading at $6,202 at the time of writing this article, it is certain that the latter is imminent if Luorio’s predictions are true. It the two are right then $6,000 will also be the lowest the cryptocurrency can go before bouncing back hopefully to fulfill the previous predictions of $50,000 value before the end of the year. For now, the question is will bitcoin really “bottom out” at $6,000?