Crypto

Bitcoin (BTC) price to drop to $14,000 (USD), cryptocurrency expert warns

Last week, the price of digital gold rose by 5.5%, ending the trading session on Sunday at $19,500. By the way, over the past week, bitcoin has shown growth after a three-week fall. Thus, from the second half of August and throughout September, the coin fell in price by almost 20% in total – from $24,400 to $19,800. At the time of writing, BTC is worth $19,115.

At the beginning of the last seven-day period, the main cryptocurrency was firmly in the green zone and even easily overcame the $20,000 mark thanks to the spectacular growth of US stock indices, but lost points closer to the weekend.

Since the beginning of 2022, analysts have increasingly emphasized the high level of correlation between the US securities market and virtual assets, anticipating the consequences of the geopolitical conflict in Eastern Europe and further steps by the US Federal Reserve.

Earlier, experts from the investment company Arkane Research have already said that the correlation of BTC and technological papers has reached its highest level since July 2020.

In addition, the day before, economists from the analytical platform TradingView said that the ratio of the cryptocurrency market to the US stock market reached 70% in the last quarter.

At the same time, an important factor that put pressure on digital assets by the end of the week was the report of the US Department of Labor on employment published on Thursday. According to him, the number of Americans who applied for unemployment benefits for the first time increased by 29,000 in September to 219,000, while the market predicted an average increase of only 204,000.

Investors are confident that the report, published last week, will become a benchmark for the Federal Reserve in its strategy to determine the country’s future monetary policy.

By the way, the current decline in the cryptocurrency market is directly related to the monetary policy of the Federal Reserve System.

The other day, experts from the analytical company Kia reported that the volatility of BTC significantly depends on the results of meetings of members of the US central bank.

According to Kaiko analysts, the high correlation of bitcoin with the decisions of the US Federal Reserve was noted in the summer of 2021, which indicates that the cryptocurrency market has long been influenced by key macroeconomic indicators.

So, when in May 2022 the US Federal Reserve increased the range of interest rates to 0.75-1% per annum, the cost of the first cryptocurrency sharply exceeded the $40,000 mark, but on the same day fell below $36,000, starting a protracted correction process.

In June of this year, when the US regulator raised its key rate to 1.5-1.75%, BTC immediately reacted with impressive growth.

Experts believe that the digital asset market will be even more responsive to statements from global central banks in the coming months, as interest rate hikes often drastically reduce investors’ ability to invest in risky assets such as virtual currencies.

In terms of the top 10 cryptocurrencies by capitalization, coins have shown mixed results over the past week. At the same time, the worst results were recorded by Cardano (-1.7%), and the best by XRP (+11.5%).

As of the end of last week, the total market capitalization of cryptocurrencies was $985.36 trillion, according to the world’s largest virtual asset data aggregator CoinGecko.

Forecasts of cryptocurrency experts

Since the beginning of October, digital asset market analysts have become increasingly optimistic about its future. So, on the eve of financial experts DappRadar said that in the third quarter of 2022, the cryptocurrency entered a long phase of consolidation.

DappRadar is confident that the growth of virtual coins began in September. Between July and September, the value of digital currencies fell by 8.5%. The first signs of recovery did not appear until the end of last month, and one of the highlights was the Ethereum upgrade.

So, on the morning of September 15, the Ethereum network successfully switched from Proof-of-Work (PoW) to Proof-of-Stake (PoS), which does not require mining. The transition took place as part of an important Merge update.

Read also:  Blockchain project Venom Foundation has launched a $1 billion fund for investments in Web3.

At the same time, in the first hours after the transition of ETH to the Proof-of-Stake algorithm, there was a strong influx of altcoins to centralized exchanges.

On the same day, the founder of the ETH network, Vitalik Buterin, confirmed the successful transition to PoS and the absence of failures or errors in the upgrade process. By the way, the Canadian-Russian developer has previously stated that the transition of the network to Proof-of-Stake will increase the popularity of digital assets as a payment method by reducing the commission to 2 cents. Buterin said that the popularity of cryptocurrency payments has declined after 2018 due to high transaction fees.

To date, ETH is still leading the blockchain rankings in terms of the number of DeFi projects implemented. The value of funds in protocols placed on the basis of ETH exceeded $48 billion by the end of September.

Last week, former CEO of financial conglomerate Goldman Sachs and now CEO of Real Vision Raoul Pal also said that digital assets will rise next year.

The analyst attributes his optimism for the long-term crypto market to the global economic crisis and the Ethereum merger.

So, Pal is confident that due to the transition from ETH to the Proof-of-Stake algorithm, many miners who sell altcoins on a daily basis will leave the market. As a result, the number of offers will decrease, and the monthly trading volume of Ethereum will decrease by $6 billion. In this case, the main competitor of Bitcoin will be less subject to inflation.

In addition, the CEO of Real Vision believes that 2023 could be a very successful year for Ethereum due to ever-increasing demand, reduced supply of ETH, and environmental issues for BTC.

However, there are those among crypto experts who do not believe that Bitcoin and its competitors will rise in the near future. Dogifox CEO Nicholas Merten recently stated that BTC will fall to $14,000.

The crypto expert came to this conclusion based on technical and macroeconomic factors. So, Merten is sure that the recent price of digital gold may signal the end of a 10-year bull cycle, after which the coin will no longer be a key asset compared to other commodities and stocks.

The cryptocurrency expert believes that the recent decision of the US Federal Reserve on monetary policy could also be an important macroeconomic factor that could lead to a decrease in the value of the first cryptocurrency.

Recall that during the September meeting, the US Central Bank increased the range of key interest rates by 75 basis points – to the maximum level since 2008 – 3-3.25%.

The combination of the above technical and macroeconomic factors, according to the CEO of Dogifox, will soon bring the price of bitcoin down to $14,000. If the coin drops to these values, it will be reassessed to 80% of its all-time high of $69,000.

As for the future of Bitcoin’s main competitor, Ethereum, Merten suggests that the cryptocurrency will retest the $800-$1,000 range, with prices falling even lower in the worst case.

Meanwhile, experts from the analytical company Glassnode believe that digital gold will still be in the range of $17,000 to $25,000 in the near future. At the same time, the tight monetary policy of the US Federal Reserve and other global regulators, as well as negative macroeconomic data, cross out all important positive events related to the virtual asset market.

Renowned cryptocurrency expert Tone Vays recently said that BTC enthusiasts should brace themselves for a sharp drop in the coin. At the same time, the coming collapse of assets will be “the last strong fall before the rise,” Weiss is sure. Quotes will drop to $14,000-15,000, where an ideal entry point will open. The analyst suggests that bitcoin could fall to certain lows in the near future.

Of course, the crypto expert adds, such a loud fall of the virtual asset market leader will cause other coins to fall.

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