Our analysts outlined the variables influencing the price of cryptocurrencies today. And talked about how a bearish trend may become positive and how Bitcoin might increase.
Since reaching an all-time high of $69,000 in November 2021, the price of bitcoin has decreased by 70%. The first cryptocurrency’s value peaked in 2022 at a high of $47,500 at the end of March before dropping to its present level of about $20,000. Experts from Crypto Garage highlighted the causes of price drops in the cryptocurrency market and predicted when a bull market may begin.
Bears are winning now.
Few individuals nowadays are ready to take chances. And the cause of this is an increase in funding costs following a Federal Reserve rate hike. Chen Limin, the ICB Fund’s finance director and head of trading operations, agrees. According to him, the situation may get worse due to a potential fall in the U.S. economy and volatility in the markets for raw materials.
Additionally, according to our specialists, the present bear market is expected to continue. The capitalization of cryptocurrencies may begin to increase no early than 2024, but before then, the market will need to “self-cleanse” of the most risky crypto projects. Due to declining quotations, several institutional investors and lenders have already seen issues with these projects.
Our analysts predict that bitcoin will soon reach a price of $10,000. However, cheaper prices are also conceivable. It became challenging to surpass the price of $20,000 because a full departure below this amount now required a halt. However, everything points to a quick triumph for sellers over buyers.
Our analyst argues that purchases made by institutional investors were the primary factor in the market’s first expansion. It is now a major factor in price declines. Lenders and investors withdrew from the volatile cryptocurrency market when the Federal Reserve chose to hike interest rates, freeing up capital to back more crucial positions.
It will be necessary to put money back into bitcoin markets for the next uptick. And it won’t take place until the Fed decides to revive market activity. And it is a long way off since the Fed won’t start easing monetary policy again until after it has made sure that inflation is thoroughly defeated.
Has Bitcoin reached the bottom? Will the bear market end soon and start a bull market?
A significant amount of bitcoin is now leaving exchanges. And this suggests that investors have a particular interest in it. Additionally, removing assets from circulation requires putting them in long-term storage. This may be one of the signs that this cycle of deterioration is coming to an end, according to our experts.
Due to limitations and blocks on their exchange accounts, investors do not trust CEX exchanges. Because CEX exchanges support various sanctions, they have security issues, and for a variety of other reasons, investors are compelled to withdraw assets from exchanges and store them in cold wallets or other more safe locations. Our analysts think that this is already a highly positive indication for the cryptocurrency industry.
After doing an investigation, the specialists at Crypto Garage discovered that since 2020, the exchange balances have been steadily declining and have already reached 2018 levels. However, there are increasingly more balances with non-zero amounts. This indicates that more and more individuals are “accepting and trusting” Bitcoin, as seen by the rising number of users and wallets.
Since beginning of June, when the price of bitcoin dropped to around $20,000, many whales have been trading, while smaller investors have been active since the $30,000 level.
Our experts think it is quite likely that we have already reached the bottom or are very close to it. And a loosening of Fed policy could positively motivate markets.
Exactly then, the recovery period will begin, the Fed rate will be 3.23%-3.5% by the end of the year. And improvement of situation on crypto market and start of a new growth phase is predicted already in 4Q of this year.
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