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Experts told why the price of the first cryptocurrency may continue to decline, and described possible scenarios for its movement
Bitcoin is trading well below the historic highs that were reached in 2021. Then the rate of the cryptocurrency rose to $ 69 thousand, but since then it has fallen by 70%.
On June 18, BTC fell to a minimum this year at $ 17.6 thousand By August 13, bitcoin rose to $ 25 thousand, but could not hold on to this level. As of August 23, 17:00 Moscow time, the first cryptocurrency is traded at about $ 21.4 thousand.
Experts named the reasons why the rate of the first cryptocurrency may show a further decline, and described possible scenarios of movement.
Why Bitcoin Hasn’t Bottomed Out Yet
In the coming weeks to months, bitcoin is able to set new anti-records, said Chen Limin, chief financial officer and head of the trading operations department at ICB Fund. He said that according to Grayscale’s calculations, on average, it took 250 days to end the bear phase in the past, that is, the dominance of sales in the market could last for several more months.
According to the expert, such forecasts are confirmed by the fact that cryptocurrencies remain highly sensitive to sentiment in the US stock market, which is likely to continue to decline under the pressure of tightening fed policy. In September, the US regulator is ready to raise the key rate by 50-75 bps, after which it can go for two more increases of 0.25% in November and December, says Limin.
He noted that the markets would like to see the beginning of policy easing in the coming spring, but the Fed is not ready for such a step due to the risks of fixing inflation at an elevated level. A signal about following such a line can be given by the head of the Federal Reserve Jerome Powell on August 26 at the conference of central banks in Jackson Hole – the event can become a catalyst for a new wave of sales, the expert warned.
He suggested that in such a scenario, bitcoin is likely to return to the minimum of June ($ 17.6 thousand) and further movement of its price down. Sales of speculators who purchased coins on drawdowns to $ 20 thousand, as well as some panicked investors can push the rate up to $ 12 thousand, Limin concluded.
Leading analyst of 8848 Invest Viktor Pershikov agreed with him. In his opinion, the growth of the crypto market may begin at the end of the third quarter of 2022, but before that, the final wave of decline is likely. According to him, at current levels, the number of institutional purchases is extremely small, the margin positions of retail players are also low, and this does not allow the price to grow sharply in two or three sessions.
The technical pattern suggests that we can expect another update of the minimums for BTC and other crypto assets in the next couple of weeks, Pershikov believes. He suggested that this decline has a chance to be the final one this year.
Three Scenarios for Bitcoin
Now the situation is uncertain and we can consider several scenarios for the movement of bitcoin, says Roman Nekrasov, co-founder of the ENCRY Foundation. One of them is positive, according to which the bear cycle is coming to an end and a new bullish growth will soon begin. This forecast is based on data on the sales of bitcoins by miners: they actively sold coins in April-June 2022, but now the trend has changed and it is worth waiting for the period of accumulation and growth of bitcoin to $ 30 thousand, the expert said.
According to the indicators of technical analysis, bitcoin has not yet reached the bottom, and even the level of $ 17.7 thousand, to which it fell in mid-June, can not be considered as such. The bottom under this scenario is in the region of $ 15 thousand, the expert explained. At the same time, he drew attention to the fact that technical analysis does not take into account the high volatility of cryptocurrencies and their susceptibility to quotations to “emotional outbursts and manipulative practices.”
According to the most negative forecast, in the coming month it is worth waiting for the fall of bitcoin to $ 15 thousand, and possibly up to $ 10 thousand, after which the period of growth will begin, Nekrasov said. Thus, all forecasts generally agree that bitcoin will grow, but some believe that growth has already begun, while others believe that bitcoin will become even cheaper before it starts to rise in price again, the expert concluded.
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