Experts believe that the current environment precludes a further rebound.
Risk aversion strikes back in the stock markets that this Wednesday has again suffered significant sales after the statements of the president of the Federal Reserve (Fed), Jerome Powell, showing his determination to curb inflation.
Wall Street took a hard hit with a 4% drop for the NASDAQ -which lost its support of 12,100 dollars, which has affected Bitcoin and cryptocurrencies, whose evolution in the markets goes hand in hand with the New York Stock Exchange. However, these assets have withstood the downward pull, which entails serious risks, according to experts.
Where Bitcoin is at… Back in Decline
Satoshi Nakamoto’s brainchild is back below $30,000, “which may make some a little nervous,” says Oanda analyst Craig Erlam. The expert believes that “it is difficult for risk assets to take advantage of the upswing in the current environment in a significant way”. However, for some, this is encouraging as “we have not seen a sharp reaction to moving below such a key level”. “Of course, that could change quickly as underneath it seems to offer the path of least resistance” with a control zone at 25,000-26,500 and below $20,000.
In general, the activity in the digital currency market has continued to decline and this Wednesday there has been lower volatility than the monthly average, comment Rabobank experts. The total capitalization is lower than in previous days and settles at around 1.4 billion dollars. Looking at other tokens, Ethereum has broken out of the $2,000 level.
Experts’ Predicting “Major Leg Down”
In the context described above, there is no shortage of warnings from analysts who believe that the digital asset is simply waiting to start its next bloodletting. Popular Bitcoin critic Peter Schiff calls this a classic bull trap for investors. In one of his recent Twitter posts, Schiff mentions the following:
“I must admit that I’m surprised that Bitcoin has held up this well. But don’t get cocky, hodlers. The market never gives investors this much time to buy the bottom. It’s more likely this is a bull trap to lure in as many more buyers as possible before the next major leg down.”
He continues: “Rising food and gas prices will put more pressure on Bitcoin prices. That’s because groceries and gas stations won’t exchange their food or fuel for Bitcoins. So if Bitcoin hodlers want to eat and driving will soon be forced to sell their precious ‘stash’ in order to afford it.” This will ultimately mean that Bitcoin could crash even below $20,000.
According to César Nuez, an analyst at Bolsamanía, the graphs point to a bleak outlook. “The double turn drawn around $64,000 could be giving us the shape of a double top. This formation has terrifying consequences for the coming months and that is that the figure’s fall target could be quietly at $8,000”.
The Fate of Bitcoin Price
Craig Erlam, an analyst at Oanda, comments that, “Bitcoin price is trading close to the oversold zone as suggested by the RSI on both the daily and weekly timeframes.”
Albert Salvany, strategic consultant at Belobaba CryptoFund, emphasizes that the crypto asset pool has suffered a stampede and the circle of trust in crypto assets has refocused on the irreducible ones who will either succeed or die with it. He adds that “the dominance of Bitcoin is at its highest and the market rotation is completely fired.”
The fate of Bitcoin price is another of the great unknowns to clear up in this new equation. The technical analysis is clear: the great support is at $20,000, however, Palacios anticipates that there will be a long consolidation before reaching these price levels. For Salvany, the destination is $18,000.
By Audy Castaneda
