Bitcoin Is Not A Safe Investment, Says Evercore Technical Analystbr>
Richard Ross, Evercore ISI Manager Director and Technical Analyst, said that it’s not wise to put your money in bitcoin.
Bitcoin dropped below $10,000 this week for the first time since the beginning of December 2017. It climbed to a record $20,000 last month. Some analysts are blaming the negative regulatory news from China and South Korea for the price dip. Others see the price plunge as a possible correction.
For his part, Ross warns that the 50 percent retracement from bitcoin heightens the risk that the cryptocurrency will break its 100-day moving average of $8,787. “Bitcoin has held the 100-day since 2015, so you MUST sell it below there,” Ross wrote in a report Wednesday. “You have to respect a break below that level as your final warning.”
In an interview with CNBC Fast Money Wednesday evening, Ross said it’s never safe to invest in bitcoin.
“The thing that bothers me the most is that we’re staring at the greatest bull market in the last 20 years, where you can double your money in, like one of the world’s best industrial companies, like a Boeing, which is sort of pillaring here for no good reason, up over 200 percent in two years and we’re talking about this thing here that’s lost 50 percent of its value in a month,” Ross said.
Ross advised investors to instead put their money in the stock market. “There’s a lot to like about stocks,” he said. “Which are awesome.” People investing in cryptocurrencies are “people looking for a shortcut, that are gambling.”
Dan Nathan, co-Founder and editor of RiskReversal.com, said that Ross’ bitcoin assessment sounds too “glib.” He pointed out that long-time investors in cryptocurrency, some dating back to 2013, are accustomed to market ups and downs.
Nathan added that that some of the smartest people in the world are convinced bitcoin is going to the be the next big thing the way the Internet was. Ross replied by saying that, “Smart people can go broke too.”