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Experts analyzed the situation in the crypto market and told in which case the price of bitcoin will continue to fall
On Monday, May 23, the bitcoin rate reached $ 30.6 thousand As of 13:05 Moscow time, the first cryptocurrency is traded at $ 30.4 thousand, over the past day it has risen in price by 1%. Over the week, the value of the asset decreased by 3%.
Experts told how the situation in the industry will change next week.
“Buyers are still vulnerable”
BitRiver Financial Analyst Vladislav Antonov
Bitcoin is trading in the red for the eighth week in a row. The total losses were 39% and 44.59% to a minimum of $ 26.7 thousand The correlation of the first cryptocurrency with the S&P500 index is 0.78 and 0.75 for 30 and 90 days, respectively (the indicators are inaccurate, since the cryptocurrency is traded on weekends).
The cryptocurrency market remains dependent on the US stock market. The stock market is storming due to the tightening of monetary policy of the US Federal Reserve. The regulator is fighting high inflation by raising rates.
At the end of the week, the S&P500 and Nasdaq Composite also recorded the seventh negative week in a row. The series is the longest since the end of the “dot-com bubble” in 2001. On Friday, the US dollar slightly corrected against world currencies, but is still trading at maximum levels.
The BTC/USDT pair is trading near the trend line, which is drawn through the lows of $3782 (March 13, 2020) and $10,136 (September 23, 2020). Her puncture took place on May 11-12, 2022. Against the background of the rebound in the indices, buyers defended the zone of $ 28.5-29.5 thousand, but are still vulnerable to a further fall to the level of $ 20 thousand.
On Friday, the S&P500 index won back all losses and closed in a meager plus of 0.07%. The rebound gave hope to buyers in the crypto market over the weekend to return to $ 30.2 thousand The situation on cryptocurrencies remains critical. Buyers are practically hanging by a thread. The “bearish” trend is intensifying and you do not know where the support for traders and investors will come from, what news will trigger a new rally in the stock and cryptocurrency markets.
“A new bullish cycle is unlikely to be possible in the coming months”
Co-founder of ENCRY Foundation Roman Nekrasov
The crypto market is under pressure from macroeconomic factors. In particular, high growth rates of consumer prices in the world and in the United States remain. The situation was also affected by the collapse of the algorithmic stablecoin UST, which many analysts compare with the fall of Mt Gox, which launched a long recession in the crypto market.
It is unlikely that bitcoin will be able to overcome negative factors and move into the growth stage in the coming months, not only weeks. In June, the Fed is expected to raise the rate again, which means that investors, against the background of geopolitical instability and high inflation, will further increase investments in such defensive assets as US Treasury securities, whose yield will rise due to the increase in the key rate.
At the same time, the crypto market is heterogeneous: there is bitcoin, and there are altcoins. And in the current environment, there is a flow of capital from altcoins back to bitcoin, whose market share has again moved to growth. This means that participants in the crypto market are looking for ways to reduce the risks from the depreciation of their portfolios and transfer assets from more risky to less risky – bitcoin has traditionally been less risky than altcoins and greater survivability.
I expect in the coming weeks bitcoin trading in the range from $ 25 thousand to $ 30 thousand, while it is unlikely that bitcoin will be able to gain a foothold even above $ 30 thousand. More negative scenarios are not excluded, when bitcoin falls to $ 22 thousand.
Now the nearest support level, at which voluminous buy orders are visible, is $ 20-$ 22 thousand It will be difficult for bitcoin to fall below these marks, but again it is not impossible. If the rate of the first cryptocurrency goes below $ 25 thousand and gains a foothold there, then it is possible that bitcoin will go into free fall, when the rate will rapidly break through the support at the level of $ 20 thousand, and will go lower.
Bitcoin’s new bull cycle is unlikely to be possible in the coming months. There is a chance that in the second half of 2022, bitcoin will be able to overcome the negative information and macroeconomic background and grow, but it is unlikely that this growth will lead it above $ 45 thousand.
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