According to Jeffrey Gundlach, the trading pattern for Bitcoin may suggest a price drop below $30,000.
Jeffrey Gundlach, the CEO of investment management firm DoubleLine, implied that Bitcoin could see more favorable activity in the long term than that of the U.S. dollar.
In a Wednesday interview on CNBC’s Halftime Report, Gundlach said he believed people would be able to purchase Bitcoin (BTC) for under $23,000 soon given the likelihood of the crypto asset forming a head-and-shoulders trading pattern. He was seemingly referring to a "head" when the BTC price peaked at more than $64,000 on April 13 and the shoulders as the early January surge to more than $40,000 and the recent drop to the $30,000s.
“I’m not a big believer in head-and-shoulders tops but this one looks pretty convincing,” said Gundlach. “Turning neutral at $23,000 was obviously too early, but I’ve got a feeling you’re going to be able to buy it below $23,000 again.”
Though the billionaire said he was bullish on the cryptocurrency early last year, he has always considered it a “highly speculative and highly volatile” asset, calling the current price chart “pretty scary.” While volatility would suggest price surges as well as drops, Gundlach’s views on the U.S. dollar beyond this year were seemingly more bearish.
The DoubleLine CEO speculated that both the U.S. trade and budget deficits, which have risen likely as a result of the economic fallout of the ongoing pandemic, may cause the dollar to “fall pretty substantially.” He added:
“In the short term, the dynamics have been and will continue to be in place for the dollar to be marginally or moderately stronger. In the longer term, I think the dollar [is] doomed.”
According to MarketWatch’s U.S. dollar index, the dollar was trading at 92.64 at the time of publication, rising roughly 0.25% in the last 24 hours. The price of Bitcoin has fallen roughly 4% to reach $31,436.
Gundlach, known by many as the “Bond King,” has previously called Bitcoin a good hedge against inflation along with gold but expressed concerns about cryptocurrencies’ traceability. DoubleLine currently has more than $135 billion in assets under management — none of which purportedly includes crypto — and the CEO has said he personally doesn’t “believe in Bitcoin.”
“I’ve never been long Bitcoin personally, I’ve never been short, it’s just not for me,” said Gundlach. “I don’t have that kind of risk tolerance in my DNA where I have to get worried to pull up the quote every day to see if it’s down 40%.”