Alexander Kuptsikevich
FxPro Financial Services Limited
The tug of war in Bitcoin near the psychologically important $20K continues. After losing 4.7% to $19.9K on Wednesday, the first cryptocurrency returned to $20.4K on Thursday morning. Ethereum is down 1.2% to $1085 in 24 hours, with the top 10 altcoins trending from a 2% drop (Tron) to a 3% rise (Solana).
Total crypto market capitalisation, according to CoinMarketCap, was unchanged overnight, remaining at $900bn. Bitcoin’s dominance index fell 0.4 points to 43.1%.
By Thursday, the Cryptocurrency Fear and Greed Index stood at 11 points (“extreme fear”).
Ian Harnett, a co-founder of Absolute Strategy Research, has suggested that bitcoin will collapse to $13K this year, as it is characterised by a drop of 80% from the historic highs it reached.
Arcane Research noted that in 2013 and 2017, BTC fell 85% and 84%. If history repeats, bitcoin’s downside potential persists to the $10,350 mark.
However, we note that in previous bullish cycles, the strengthening of BTCUSD has been many times stronger. For example, in 2013, it was more than 90 times. In 2017, it was 20 times, while in a year-long growth cycle through the highs of 2021, we saw “only” a tenfold increase in price.
In our view, it is much more reliable to estimate that Bitcoin finds a long-term bottom near the highs of the previous 4-year cycle, where the first cryptocurrency has already rolled back. Even so, it may not be the best time to buy, as it may take considerable time before the crypto market digests the recent turmoil and enters a new phase of sustained demand from broad segments of investors, not just stressed asset hunters.
The ECB chief has called for regulating the cryptocurrency lending sector amid growing activity on crypto lending platforms and problems with Celsius and Finblox.
SEC Commissioner Esther Pearce believes that a bearish crypto market would benefit the industry and create a more sustainable foundation for its development.
Tesla CEO Elon Musk has said that he has never encouraged anyone to invest in cryptocurrencies and all accusations of him promoting a “Dogecoin pyramid scheme” are unfounded. Musk has recently sued for advertising DOGE for $258bn.
Tether, the issuer of the largest USDT stablecoin by capitalisation, announced the release of a GBPT “stablecoin” pegged to sterling.
Trade Responsibly. CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.37% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. The Analysts' opinions are for informational purposes only and should not be considered as a recommendation or trading advice.
Recommended Content
Editors’ Picks
Will Dogecoin (DOGE) price pull an XRP and rally 60% next week?
Dogecoin price has been in a tight range bound movement since November 22. However, the recent recovery above the range low looks promising and hints at an explosive move for next week.
SEC Chair Gary Gensler’s latest call signals tough times ahead for crypto players
US Securities and Exchange Commission (SEC) chair, Gary Gensler, has hinted at tough times ahead for crypto players. In his testimony before the House Appropriations Subcommittee on Financial Service and General Government, Gensler advocated for additional infrastructure.
Crypto firms' de-banking escalates as banks reject applications due to liquidity and regulatory concerns
The crypto market has been facing hurdle after hurdle since Q2 2022 when Three Arrows Capital collapsed, which worsened in November 2022 following the bankruptcy of FTX. This led to a number of crypto companies falling.
Making a case for Binance Bicasso NFTs playing catalyst to BNB price recovery, $357 incoming?
BNB price is up three days in a row despite the legal tussle between the largest exchange by trading volume, its CEO Changpeng Zhao (CZ), and the Commodity Futures Trading Commission (CFTC).
Bitcoin: Breaking down key BTC levels to accumulate for Q2, 2023
Bitcoin price shows an interesting outlook as the first quarter of 2023 comes to an end. BTC has shown strength since day one of 2023 and has netted investors approximately 70% in returns.