Bitcoin’s brutal selloff may be nearly over.
That’s the message from Bitwise chief investment officer Matt Hougan, who told investors that Bitcoin price is somewhere near the bottom of a six-month correction with “not much downside left.”
“We’re in this uncomfortable bear market,” Hougan said in a December 3 panel with investors. “We’re in a six-month bottom phase, and somewhere in that period we’re close to the bottom.”
Bitcoin was trading around $92,000 on Thursday, down more than 25% from its October highs above $120,000.
Even so, Bitwise has left its $200,000 Bitcoin target intact, although it admits the timing was off. The company, said Hougan, underestimated the amount of selling that would take place when the cryptocurrency dipped to $100,000, along with how much investors still believe — and fear — the four-year cycle narrative.
Record outflows from Bitcoin exchange-traded products combined with digital asset treasuries that have exhausted their buying power have, for the most part, driven the downfall.
Wrong dates
Just as 2025 rolled in, Bitwise made a lofty prediction: Bitcoin would top $200,000 before the year was out.
The firm got the direction right but sorely missed the timing, according to Hougan.
Two factors derailed the timeline.
First, selling pressure at $100,000 exceeded expectations. Round numbers create psychological resistance, triggering profit-taking from earlier buyers, the executive said. Moreover, the spike from the previous high of $74,000 to this cycle’s record of $126,000 went nearly without obstacles.
At some point, investors were going to take profit.
Second, fear surrounding Bitcoin’s four-year boom-bust cycle dominated investor sentiment. Gauging from previous cycles, traders worried that 2025 would mark a top, which became a self-fulfilling prophecy.
Hougan had already predicted that the four-year cycle was over, however.
“The forces that have created prior four-year cycles are weaker,” Hougan said back in July. “The halving is half as important every four years, the interest rate cycle is positive for crypto, and blow-up risk has attenuated.”
Setup remains compelling
Despite the selloff, Hougan sees several catalysts that could drive Bitcoin higher.
Vanguard is allowing Bitcoin ETFs on its platform, giving 8 million clients access to the cryptocurrency. Bank of America is allowing advisors to recommend Bitcoin ETFs, unlocking a $3.5 trillion asset pool.
And the Fed is ending quantitative tightening in December, improving liquidity conditions, which tends to favour risk-on assets like Bitcoin.
“The end of year could be very good,” Hougan said. “There’s not much downside left.”
Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Got a tip? Email him at psolimano@dlnews.com.
