Crypto: The bulls may have their horns broken
Market overview
The crypto market cap has fallen to $2.42 trillion, under pressure from sellers alongside risk assets, as the Fed pushes the next rate cut further into the future, boosting the dollar’s appeal. The decline also coincided with the upper boundary of the corrective rebound being touched. It is possible that cryptocurrencies were simply unable to ignore the significant deterioration in external sentiment, but they may soon return to outperforming other assets. Overall, however, we maintain a more pessimistic view, anticipating the bear market will continue, with bulls likely to be beaten soon, not least due to macro factors.
Bitcoin has fallen by 8.4% from its latest peak on Tuesday morning and briefly dipped below 70 at the start of the day on Thursday. At these levels, BTC is testing the 50-day moving average from above. As we have repeatedly warned previously, the upward momentum will face significant resistance at the boundary of a typical correction from the latest downward impulse. The leading cryptocurrency has more room to move within the $65K–$75K range. Breaking out of this range may require more momentum to determine the market’s direction for the coming days or weeks.
News background
Investment bank Citigroup has lowered its 12-month price targets for Bitcoin and Ethereum amid delays in the adoption of US cryptocurrency legislation. The forecast for Bitcoin has been lowered from $143,000 to $112,000, and for Ethereum from $4,304 to $3,175. In a negative scenario, BTC risks falling to $58,000 and ETH to $1,198.
Bitcoin still has two-thirds of its bear cycle ahead, said Willy Wu, co-founder of the Bitcoin Vector project, urging investors to remain cautious. In his view, it is premature to expect sustained growth without an improvement in market liquidity.
Ethereum developers are testing the Fast Confirmation Rule (FCR), which will speed up transfers between the mainnet and the second layer from 13 minutes to 13 seconds.
The US SEC and CFTC have published a joint statement stating that almost all crypto assets should not be considered securities.
Author
Alexander Kuptsikevich, a senior market analyst at FxPro, has been with the company since its foundation. From time to time, he gives commentaries on radio and television. He publishes in major economic and socio-political media.
