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Bitcoin It’s falling, but how far can it go?
The leading cryptocurrency has fallen more than 5.7% in the past week. It has dipped below $57,000 today as several wallets are linked to a defunct cryptocurrency exchange Mt. Gox made minor transactions. Persistent selling by the German government, on the move today another $75 million in Bitcoin on the exchanges, has apparently also scared investors.
“The short-term outlook is a little bearish, but not extremely bearish,” said Basile Maire, co-founder of Decentralized Exchange. D8X and former bank treasury specialist, said Decipher.
Macroeconomic conditions and Uncertainty Clouds US Elections It is likely that he is also playing a role in the current bearish sentiment. The The Federal Reserve said yesterday that while inflation in the US market may be moderating, it still remains well above the target rate, which could therefore impact the chances of the Fed lowering interest rates this year.
The Fed’s continued interest rate cuts are seen as a bearish signal for risky assets, such as Bitcoinas investors are typically less likely to move their dollars into the market in high-rate conditions. However, some analysts see signs that the pain may be short-lived.
Maire says the Bitcoin options market, based on July expirations, shows that few market participants believe the price of Bitcoin will fall below $50,000 this month. Options “cluster between $50,000 and $60,000, with the most volume closer to $60,000,” Maire said.
That means those who open options contracts, which are used to bet on the future price of Bitcoin, believe that Bitcoin is more likely to end the month near $60,000 than anywhere else. Other analysts have a different view.
“Bitcoin is more likely to fall to $51,500 than to rise to $65,800,” said Alex Kuptsikevich, FxPro senior market analyst, said Decipher. Kuptsikevich identified the $50,000 market as the “February consolidation area,” which is the price point where most of the Bitcoin buying took place in February. He believes this could be the next stop for Bitcoin.
Digital asset firm 10x Research echoed the sentiment, suggesting that $60,000 was a key level for Bitcoin miners and buyers of spot Bitcoin ETFs. “Only uninformed traders are willing to buy here. A break of this support could cause a sharp decline towards the low $50,000s,” a firm report said.
“How far BTC can go will largely depend on continued selling by large entities,” said Justin d’Anethan, APAC business development manager for the market maker. Rock Keysaid Decipher“We may see some support in the low $50,000 range, when Bitcoin was stagnant between $50,000 and $52,000 in February.”
Some of the biggest investments in Bitcoin now come from ETFs after their approval in January. But in the world of traditional finance, Bitcoin sticks out like a sore thumb.
“Cryptocurrency ETFs are among the most volatile investments in a traditional investment portfolio that is otherwise comprised of bonds, diversified stocks and commodities,” Maire said. “So whenever portfolio managers need to sell riskier assets, cryptocurrencies are a likely candidate.”
While the short term may not be rosy, analysts are more optimistic in the medium term.
“Despite the correction, the options market is still heavily biased towards BTC growth, as evidenced by the strong interest in long-term options with strikes of $100,000-120,000,” Kuptsikevich said. “According to QCP CapitalThis indicates the likelihood of a resumption of the rally by the end of the year.”
In other words, hold on a little longer. And while this has certainly been a winning strategy for early Bitcoin buyers, anyone who bought at the peak last March is certainly hurting.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.
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