Bitcoin and other forms of crypto have been experiencing a heavy pullback as of late. BTC, the granddaddy of all digital currencies, is now trading once again for just over $40,000, a slump it managed to get away from a few weeks ago.
Bitcoin Has Stumbled, but There May Be Hope
However, now it looks like things are going back to “normal,” and when we say normal, we mean back where bitcoin has been for most of 2022. For the most part, this year has not been terribly kind to BTC or its altcoin cousins, especially when one considers the fact that the asset was trading for nearly $70,000 last November.
Still, the present circumstances aren’t depressing analysts. In fact, several of them are still quite bullish about where the digital currency space is heading. They are convinced this is just a bump in the road, but that in the end, bitcoin and its counterparts are going to accomplish some big things.
One such analyst is Marcello Mari, CEO of the crypto investment platform Singularity DAO. He feels the crypto space is traveling a wide range and that several assets remain highly correlated with each other. When discussing the reasons for the pullback not too long ago in an interview, he stated:
The primary catalyst for the pullback was the inflation numbers. The market was pricing in higher inflation and the more the CPI increases, the more aggressive the Federal Reserve is going to be in hiking interest rates. However, even though inflation numbers were high, they were in line with expectations, so all the pricing for higher numbers had to get taken out. Will that last? Will the market continue to go up? I think it’s too early to say. We still need to see if the inflation numbers drop off and remain down. We could be close to a peak, but it’s too early to say.
He says he doesn’t see cryptocurrencies moving independently of each other in the coming weeks, commenting:
Cryptos are, for the most part, moving on what’s happening with macro. So, until there is a significant catalyst which is just related to crypto, I don’t see them moving independently. I see them moving based on macro influences, and macro influences are being driven by inflation numbers and Federal Reserve rate hike expectations.
Neutral to the Space?
He says that for now, he has a rather neutral attitude towards crypto, and states:
I will turn bullish if we see a drop off in inflation numbers and then the Federal Reserve cuts back on the aggression in the hiking policy. So, as it stands now, what drove the entire cycle in cryptos was loads of liquidity coming in during a period of accommodative policy from central banks.