Investing.com — Wolfe Research analysts maintained a bearish outlook on Bitcoin and the broader cryptocurrency market in a note Thursday, citing poor recent performance and waning investor confidence.
According to the firm, “it has not been a pretty past few months for Crypto, or for risk assets in general.”
They note that Bitcoin is now down 25% from its highs, while Ethereum and Solana have fallen even more, down 45% and 40% respectively.
“We are seeing Crypto underperform every major assert class with any signs of relief absent thus far,” adds the firm.
They believe that “risk appetite and overall confidence is at a multi-year low,” which is reflected in investors’ reluctance to place bets on the crypto market.
This lack of enthusiasm has also led to gold significantly outperforming Bitcoin since March, according to Wolfe Research.
The firm stresses that its proprietary trend model, which has successfully guided investors over the past five years, turned negative on Bitcoin in April.
Since then, they state it has only briefly moved to a neutral stance before reverting to bearish territory.
“At the end of the day, we are objective trend followers, and thus will continue to maintain a bearish view on Crypto until trend improves,” Wolfe analysts said.
Looking ahead, Wolfe Research pointed out a key price level for Bitcoin, suggesting that if the cryptocurrency falls below $50,000, the next major area of support will be around $42,000.
Until the overall trend changes, Wolfe remains cautious on crypto, waiting for signs of a meaningful recovery.
