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Monetary conditions around the world have tightened, sending the crypto market in a crash. The pressure of negative inflation is obviously too much to bear for Bitcoin, which remains in a bearish market. Currently clinging to just over $19,000, experts predict even bleaker times for crypto. Conflicting rate hike expectations
Bitcoin has once again failed to preserve the support levels from recent weeks. Prices have dipped almost 9% in recent days, falling down from $21,000. It’s a bearish market once again for the millionth time this year in the wake of the impending financial recession. Key rate hikes are supposed
Are we seeing the death of cryptocurrencies? Prices have once again dropped in the past week, with Bitcoin sliding down to $18,000. That’s pretty much next to 2017 prices when the famous bubble burst. Many believe that there’s no going back from this. Prices will continue dropping until they flatline
Monetary conditions around the world have tightened, sending the crypto market in a crash. The pressure of negative inflation is obviously too much to bear for Bitcoin, which remains in a bearish market. Currently clinging to just over $19,000, experts predict even bleaker times for crypto. Conflicting rate hike expectations are making Bitcoin’s price even more volatile, and some experts believe that the price drops will continue, with Bitcoin essentially hitting $12K.
Is that the darkest night before dawn? No one knows for sure if or when crypto makes a comeback, but the current situation doesn’t instill a lot of hope.
Waiting on the September 21 FOMC
All eyes are pointed at the September 21 FOMC. The Fed two day meeting started on September 20 and will end on September 22. Everyone expects the interest rates to go up once again, this time by three-quarter points. It can lead to another massive price decline for Bitcoin.
Over the past week, Bitcoin suffered a 15% decline as the market braced for monetary tightening policies. The August Consumer Price Index exceeded expectations by around 0.2%, while the year to year inflation rate is 8.3%. All of that has led to massive price increases on many products, and experts believe an even bigger financial crisis is coming. In a time where Bitcoin was poised to shine, it has failed to hit new heights and dragged the crypto market down with it.
Is there reason for optimism? Not in the short run. Experts think that the bearish trend will continue. The price decline of last week was the worst compared to other CPI-related drops in 2022. A mismatch in expectations as well as uncertainty among investors is what fueled it, and it seems that the declines don’t stop here.
Many experts believe that a massive drop toward $12K is coming as interest rates are climbing higher. Even if the Russia-Ukraine war stops, its effects along with the reeling effects of the COVID-19 pandemic have brought the world on the bring of financial disaster. Bitcoin and cryptos are feeling the heat too. Crypto expert Doctor Profit has said that the FOMC’s decision will bring a bloodbath to the crypto market, saying that Bitcoin’s price has hit rock bottom at current levels.
The bottom is already forming for Bitcoin’s price at current levels, and Doctor Profit thinks that’s a good thing. He said he expects prices to go between $18,000 and $25,000 until March 2023, although that’s without including the rising interest rates in the equation. As he said, if the rate goes up to 1bps, there will be blood.
As of right now, the future of cryptocurrencies is unclear. Ethereum just upgraded its network to go from mining to proof of stake, but the Merge didn’t have the positive effect many were hoping for. Bitcoin remains the only minable crypto right now, but it’s not valuable at these prices. This year is probably a dead end, so we’d just wait and see what spring brings.
Bitcoin has once again failed to preserve the support levels from recent weeks. Prices have dipped almost 9% in recent days, falling down from $21,000. It’s a bearish market once again for the millionth time this year in the wake of the impending financial recession. Key rate hikes are supposed to be announced by the Fed in the next week, creating risk-asset markets. Bitcoin proved very sensitive to these matters, once again dropping the $21,000 level.
Currently trading for just over $20,000, there are rumors that it could once again slip below that level. US equities face similar woes. S&P 500 is also down, while the Nasdaq composite index is 4% lower than the weekend. Until the Fed stops its rate hikes, the price will continue dropping.
Red-Hot CPI Also a Problem
In late August, the CPI turned up 8.3% instead of 8.1% as expected. The Consumer Price Index’s annual increase was much higher than expected as global financial markets took a trip south. Market participants have realized that the Fed must increase the rates in order to keep inflation at bay, which is already rampant as is.
On Tuesday, Bitcoin traders were pretty bullish, resulting in a resistance that nearly had a spike at $23,000. It was short-lived, though, as it sparked a 7.5% sell-off in price that resulted in a new Bitcoin price low of just over $21K. The early Tuesday rally was noticed by some experts who highlighted that the world’s top cryptocurrency is on a run. Bulls have managed to negate a price downtrend on the daily chart, although recent gains suggest that a near-term market bottom in in place. Prices can still continue working sideways to go higher in the near term, giving traders and holders some hope.
However, if sell-offs like Tuesday continue again, the price declines will go deeper. It’s been almost a year since Bitcoin peaked in November 2021, and there’s no sign it’ll go that high ever again. At least it seems impossible, although no one can know with Bitcoin’s volatility.
Bear Market Close to Its End?
The fact that it’s been nearly a year since Bitcoin peaked may spell the end of its bear run. Historically, bear trends find their absolute bottom after 365 days. There’s still just a couple of months for that cycle to reach its end, which might mark off a new bull run. At least we all hope so.
But, things may go even worse before they get better. Independent market analyst Il Capo of Crypto says that Bitcoin could drop further down to the $14K-$16K range before it goes bullish. He also suggested that it may rise to $23K, but that wouldn’t be the bullish point.
On a global scale, the cryptocurrency market is still dominated by Bitcoin (40%). It stands at over $1,023 trillion, with hopes of it going higher. It’s all a bit too much to bear at the moment, but things might look better by the end of the year.
Are we seeing the death of cryptocurrencies? Prices have once again dropped in the past week, with Bitcoin sliding down to $18,000. That’s pretty much next to 2017 prices when the famous bubble burst. Many believe that there’s no going back from this. Prices will continue dropping until they flatline as many are selling off their crypto stocks and pro traders are avoiding leverage longs.
Maybe it’s a bit too early to call it the death of crypto, but things aren’t exactly great. To be honest, the current geopolitical climate and war are messing things up, and not just for crypto. It’s going to be a harsh and long winter considering the lack of energy, and it’s also going to be a very long crypto winter as it seems.
Traders Avoiding Leverage Longs
Bitcoin has nose-dived to its lowest point since mid-July. Pro traders are aware of this situation and remain very skeptical of a quick recovery. Price corrections are possible, but not nearly as big as many have thought. Early on September 6, there was a 2% price pump that saw Bitcoin jump to $20,000 all of a sudden, but it backfired quickly and the price slid further down.
Currently trading just over $18,000, Bitcoin’s volatility remains a big problem. Stock markets are crashing and further extending the bearish market. There’s no sign of bulls anywhere, even if there was a positive movement last month. It was all erased in the past week with crypto prices dropping left and right.
So, what’s on the horizon? Well, considering the outlook in the long run, things aren’t looking good. According to experts, Bitcoin’s daily range has narrowed down significantly. This may indicate that a massive capitulation is to follow. Bitcoin has been trading in a narrow range for a long time, and that’s precisely why experts believe it’ll capitulate. Which, of course, isn’t the news we or any trader wanted to hear.
Is this true? Yes, and experts have cited a couple of factors as evidence that traders are fighting hard to keep prices higher. First, Bitcoin has managed to avoid the selloff in the stock market, avoiding the downsize which was its kryptonite in the past. Second, the strengthening US Dollar has been on a climb, and it has given a lot of headwind to Bitcoin in the past. Obviously, that hasn’t happened now, which is why many believe a capitulation is coming.
Get Ready for a Long Winter
With autumn on our doorsteps and winter to follow soon, it’s obvious that things will get worse before they get better. If they get better. Many predict crypto prices to fall in the $10,000-$12,000 range, which will be a massive defeat for Bitcoin and crypto prices in general.
One thing is for sure. With the ongoing Russia-Ukraine war and gas prices sky-high, there will be no room for improvements on the crypto market. Worldwide legalization could help the price up, but since that’s not happening, we’re expecting prices to drop even more.
The stock market is down after Germany reported the worst inflation in the past 50 years. In a move that wasn’t that surprising, Bitcoin fell just as sharp as stocks. While it was developed to be independent from stocks and other commodities, recent months have shown that it moves right with the stock market, especially when it comes to technology stocks.
It fell below $20,000 for the first time in a couple of months for a while on Monday. Fears resulted in major sell-offs as traders moved to protect their assets. It didn’t last long, and Bitcoin managed to find its way back to $20,000. But, it couldn’t get past it, currently trading for just over that price. If the past month has shown progression as the leading cryptocurrency went at the $25,000 price post, this one has shown regression to the dismay of traders and investors.
The World’s Economic Shape Harms the Crypto Market
It’s no wonder that the world is currently in the middle of a financial crisis. Scratch that – we haven’t even begun to feel its effects. In the wake of the Russia-Ukraine war, prices on commodities and oil have gone sky-high. Gas prices are jumping too, and with winter ahead of us, the world might see the biggest crisis in the past century. Of course, commodities are feeling the heat right now, and they’re harming the crypto market too.
Last week, Germany released a report for its harmonized inflation rate that has climbed to 8.8%. Analysts were expecting 9%, but the government obviously managed to tweak the numbers a bit. While the reports are below the expected numbers, the 8.8% inflation rate is still Germany’s highest in the past 50 years. Rate hikes will almost certainly be used to prevent inflation from going higher, and that could hurt the pockets of Germans. It’s clear that a financial crisis is looming on top of the energy crisis everyone expects this winter.
In the USA, there’s been continued tightness in labor markets, which is almost always a precursor for high inflation. Things aren’t looking good for the USA, no matter how strong the Dollar appears to be. Crude oil and natural gas prices were down over 5% and 2% respectively on Tuesday, and the crypto market followed. Almost everything is in the red right now, with only flashes of green and no major positive moves.
A Downward Trend
Bitcoin resumes a downward trend that has been going on for a while. There was a slight pause in the past month, but the trend continued right after. It is currently in oversold territory with the RSI (Relative Strength Index) falling down to 30. The 10-day moving average remains below the 50-day RMA, causing a moving average crossover that doesn’t bring any good news.
Where does that leave rest of the assets? Nowhere, to be honest. There haven’t been major positive developments regarding the price of Ethereum, Litecoin, or any other altcoin. Traders just need to hold their ground for the moment, and see what next month and the winter ahead bring.
After seeing an initial breakout that has seen it race toward $25,000 in the past few weeks, the bearish sentiment has returned in the Bitcoin market. Nevertheless, the breakout and two-month rally have had a positive impact on many traders, restoring faith that the price could correct further. A recent Bitcoin poll on CoinMarketCap which involved over 20,000 people has set the end of September price close to the $30,000 mark.
It’s obvious that people believe that the price could go up further, and that could happen soon. It’s the jump Bitcoin and the crypto market desperately need in a year where things have gone awry. This year was supposed to be a major breakout for Bitcoin, but the Russia-Ukraine war and the fall of other commodities have resulted in a strong bearish pull.
Struggling to Stay Afloat
Bitcoin is once again struggling to stay above $21,000. It’s been up and down in the past 24 hours, even dipping below $21,000 at one point. At the moment of writing, it’s trading at just over $21,320, but struggling mightily to stay above that point. According to experts, the asset is stable right now, but could see strengths from Eurozone activities soon.
It’s good that Bitcoin is somewhat stable in its price range while the other assets decline. The Euro has just fallen under the US Dollar, but if it reverses and stocks bounce too, Bitcoin could find some decent strengths.
On the other hand, podcaster Peter Schiff who’s also the CEO of Euro Pacific Capital expects Bitcoin to fall down the ladder further. He’s a vocal Bitcoin critic who believes crypto is a scheme that doesn’t work, and he’s taken to Twitter to warn users of another dump soon. According to his tweet, CNBC has been pumping up Bitcoin pretty hard recently, leading many people to invest in crypto. He thinks it’s a bad move as there’s a major dump coming soon, reigniting fears about a bearish winter.
Schiff’s warnings have come true this year, and he never forgets to boast about it on Twitter. However, he’s been a vocal opponent on Bitcoin, so his warnings should be taken with a pinch of salt.
Crypto analyst firm Rekt Capital believes that Bitcoin could soon correct further. It has cited it trading above the 200-week moving average, noting that historically, the asset has plunged once it breached that level. BTC has already declined 21% below the 200-week MA earlier in June, which is in line with previous occurrences.
Fears about a possible harsh crypto winter mirror the upcoming energetic and financial crisis. By all means, the upcoming winter should be the toughest one in decades, and this will surely reflect in the crypto market. It would be great if Bitcoin stays afloat until then and survives the winter unscathed. The whole market will most likely collapse if Bitcoin’s price falls further down the ladder, but if the recent poll is right, there’s a major correction coming by the end of September that might set the ship’s sails the right way.