Cryptocurrencies. Bitcoin looks “absolutely terrible”

Polsat Plus Group and Polsat Foundation together for the children of Ukraine

  • Cryptocurrencies are not – contrary to many previous predictions – a response to runaway inflation and the traditional currency crisis
  • Digital Currency Bear Market Could Last Until Late Fall
  • Halving or “halving” bitcoin as a chance for profit at the turn of 2023/24
  • The cryptocurrency market looks like the tech bubble of 1999

Bitcoin Price Drops for Sixth Consecutive Week and involves the entire vast cryptocurrency market. First, one day – May 5 – the rate of the most popular virtual coin dropped flights from $39.5 to $36,000. In turn, yesterday bitcoin fell from 36,000 to 30,000, meaning it fell back to a level not seen since last July.

The bad trend also appeared on Polish cryptocurrency exchange Zonda. The bitcoin price broke the technical support located at the level of 165,547 PLN, then the lower limit of the growth channel, which is 160,150 PLN. Then the rate fell below 150,000, and now one “coin” costs about 139,000 zlotys. – The next wave in the bearish scenario is not over yet, so the bears are still the party that controls the situation on bitcoin – comments Sebastian Seliga, analyst at the Zonda exchange.

An important reason for the decline in the bitcoin exchange rate in global markets is the decision to a 50 basis point interest rate hike announced by the Fed last week. It was the biggest increase in 22 years. Bitcoin initially rose, but lost around 8% soon after.

Moreover, the token once again proves the recently very visible correlation with the valuation of the Nasdaq index, which was not the case in previous cycles of the “king of cryptocurrencies”. The weakening of the New York Stock Exchange’s technology index is regularly accompanied by declines in bitcoin prices. Yesterday, the Nasdaq fell 4.3%.

The predictions of some analysts announcing price increases in the cryptocurrency market in the face of rampant inflation and the fall in the value of fiat currencies do not hold true. Bitcoin is over 60% traded. below fall 2021 price peaks, and the vast majority of other “coins” are subject to even more drastic discounts.

Chairman of cryptocurrency exchange Luno, Viay Ayvar, believes that in the coming days bitcoin may deepen the decline to around $25,000. Cryptocurrency trading veteran Tone Vays, who thinks bitcoin is looking “absolutely terrible” right now, and six months of frustration can be expected, is similar.

“When something slips so fast, I won’t catch the falling knife.” It may take a few long months before the bear market is finally overcome. I do not exclude the situation when the bottom of this cycle will be reached in November and only then I will decide to buy bitcoin – says Vays.

He adds that if the price of the cryptocurrency drops to the region of $25-23,000 before November, he will not consider this as the last sign of a bear market. Then he will lower his bitcoin forecast to $20,000.

Experts pointing to the four-year boom phases that have proven successful so far also rated bitcoin’s weak short-term outlook. On average, the so-called halving takes place every 4 years. It consists of limiting the supply of new bitcoins and halving the reward to “miners” for mined “coins”.

Bitcoin price tends to rise “by the event” shortly before the halving and peak about a year after. The last halving took place in the spring of 2020, and the next one is expected in the first quarter of 2024. In the previous three cycles, the scenario of strong declines and gains has held true every time. Bitcoin was losing up to 80%. during the “cryptocurrency winter” between each halving.

Some investors claim that the current bitcoin price is in line with the halving pattern and expect a trading bottom at $24,000 by the end of this year. They add that if the model is correct, the price of the cryptocurrency could improve to the all-time high ($69,000 in November 2021) around August or September 2023.

“From a historical perspective, each successive halving contributes to a smaller and smaller increase in the price of bitcoin. This means that this effect is slowly ending. Of course, this does not eliminate the next halving. , because the value of the cryptocurrency will probably increase after that “- reads the research report of the team.

According to Joe Burnett, analyst at Blockware Solutions, the reduction in the number of tokens in circulation in 2024, 2028 and 2032 will benefit future bitcoin price predictions. – In the long term, bitcoin will programmatically become more loss-making. The last tokens will not be mined until around 2140, more than 100 years from now. This growing scarcity will be a significant factor influencing the future price of cryptocurrency as market participants look for instruments to preserve their wealth, Burnett told

Algorithm-based forecasting service WalletInvestor recently presented a bullish forecast for bitcoin over the next few years. The site points out that it is “an excellent long-term investment”. Based on an analysis of the cryptocurrency’s performance so far, WalletInvestor suggests that its price could reach $60,138 by May next year and $144,327 five years from now.

The forecast presented by DigitalCoinPrice is more moderate. It shows that by the end of 2025 the predicted price of the token will be $74,837, by the end of 2028 it will rise to $124,821, while in 2030 bitcoin may reach the level of $175,000.

In turn, in the predictions of Brock Pierce, the president of the Bitcoin Foundation, extreme pessimists and optimists will find something for themselves. The crypto billionaire believes that investors should refrain from going all-in with major cryptocurrency assets. The bitcoin exchange rate can go both up to $1 million and down to zero.

According to Pierce, the cryptocurrency environment is very similar to the tech bubble that occurred over two decades ago. Then there was a pogrom of internet startups. – What is happening in the cryptocurrency market now reminds me a lot of 1999. We are in this phase. Amazon and eBay and other interesting businesses emerged victorious from the dot-com era, but many businesses fell to zero. And I think it will probably be the same in the area of ​​”parts”. This does not mean, of course, that the innovation brought by virtual currencies is not real and will not play an important role in the near future, predicts Pierce.

Jacek Brzeski

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