Analysts Claim Bitcoin and Stock Price Rise Due to A.I Scenario Will End
In the investment world, many people are not reluctant to leave their journey on an asset, when they see opportunities in other assets. Like investors leaving the crypto market, to switch to the world of Artificial Intelligence or AI investing. However, they also have to be careful.
This is because currently many investors are leaving the crypto market due to the prevalence of FOMO and FUD, and prefer to invest in artificial intelligence. However, a leading investment firm has warned that the current stock market surge, which is driven in large part by FOMO and is unlikely to be sustainable in the long term.
This was disclosed by James Demmert, Chief Investment Officer at Main Street Research, who claims that he believes the market's recent strength is the result of unreasonable hype rather than solid fundamental analysis.
"Both retail and institutional investors appear to be driven by FOMO, as indicated by the unusually calm markets and low volatility gauges," said Demmert.
Demmert said this bullish sentiment had gripped investors and advised against chasing stocks at current levels. Instead, he said it would be better to be patient and use a correction in the market as a potential buying opportunity.
“The market may also be in for a test, with the FOMC expected to include another rate hike. This decision is very unsettling to investors, and of course contrary to their goal of tightening financial conditions," he said.
The earnings reports of tech giants, including Alphabet, Meta, and Microsoft could also add to the volatility in the AI sector. Several technology companies, he continued, had issued a "cautious" view. Demmert stressed that AI-related stocks that have been surging may be back down for a while.
While many of the investors are turning to AI, it turns out that there are still many who are loyal to digital assets. Like Bitcoin assets, which are predicted to increase in price because next year there will be a halving.
Bitcoin Will Drop Deeper
Regarding the current Bitcoin price predictions, analyst Toni Ghinea on Twitter is giving cautionary advice to crypto investors, warning against buying Bitcoin (BTC) at $30,000. Ghinea mentioned that there is significant resistance in the US$30,000 to US$32,000 range, so smart investors avoid buying BTC at this stage.
“Smart people don't buy BTC at $30,000. US$ 30,000 to US$ 32,000 is big resistance. I know most investors expect the price to reach US$40,000, but let's be realistic for a second. Do you really think there will be no setbacks?,” said Ghinea.
Nevertheless, Ghinea encourages traders to adopt a strategy that goes against reason, namely to buy when there is fear, sell when there is excitement. This mysterious statement suggests that investors should look for buying opportunities when the market is filled with fear and uncertainty, not when prices are high with euphoria.
“Buy when you are afraid, sell when you are euphoric. There will be much better times to buy,” concluded Ghinea.