With the price of bitcoin dropping even further and further down (at the time of writing, the world’s leading digital asset is trading for just under $38,000), many are wondering what kind of rough factors await the crypto space.
How Much Lower Will Bitcoin Go?
2022 has been a rough year for BTC and its altcoin cousins, especially when one considers the fact that roughly six months ago, the granddaddy of all crypto was trading for about $30,000 more than where it presently is. Now that the Fed has announced plans to potentially hike rates by as much as 50 basis points, some analysts believe bitcoin could fall to around $10,000… maybe even less.
This is a very dramatic drop, though it’s not implausible to assume this could happen not only because of the volatility that often comes with bitcoin, but also because the asset is now taking on more of a hedge form against inflation, which is at a 40-year high. These rate hikes are designed to control inflation, and with prices once again under control, bitcoin could find itself in a rather gray area.
Peter Brandt – the chief executive of trading service Factor – is one of the people that thinks bitcoin could experience even further drops. While he doesn’t suggest $10K for the asset, he does think that the currency could wind up falling into the low $30,000 range or even the high $20,000 range. In a recent interview, he commented:
The completion of a bear channel typically results in a decline equal to the width of the channel, or in this case a hard test of $32,000 or so. My guess is $28,000.
Eric Chen – chief executive of decentralized exchange platform Injective Labs – commented that whenever the Fed plans something rather dramatic, bitcoin is likely to be affected in some way. He mentioned in a statement:
Fed meetings always signal uncertainty and volatility, which may impact not only digital assets but also broad markets, but crypto markets are more attached to the underlying technology and value behind the projects, and larger market trends over time have proven that… I still believe crypto is the most optimal hedge against these macroeconomic issues, which is why institutional interest in the industry has continued to grow. Both venture capital funding and fund deployments into crypto are soaring at one of the fastest levels since the inception of bitcoin.
This Could Still Be a Good Month
Alex Kuptsikevich – senior market analyst at FX Pro – also threw his two cents into the mix, saying that it’s likely May could be a recovery period for bitcoin, which is typically what has happened in the past. He mentioned:
In terms of seasonality, May is considered a relative success for BTC. Over the past 11 years, bitcoin has ended the month up seven times and down four times.