Cryptocurrency analyst Mike McGlone has warned that a catalyst could lower Bitcoin (BTC) and crypto prices.
Bitcoin price could drop further
Bloomberg Intelligence senior macro strategist Mike McGlone says a catalyst could push Bitcoin (BTC) down.
In a new crypto analysis, McGlone says that if the Federal Reserve continues to raise interest rates to curb inflation despite the risk of recession, it could put downward pressure on risky assets like Bitcoin. McGlone also questions whether crypto and equities will fall more than they did in the bear markets of 2022. In his statement he said:
“Crypto and stock prices have jumped, which may leave them vulnerable to continuing the downward trend into 2022.”
McGlone says $25,000 is a key price level for Bitcoin, and March could quickly show whether the cryptocurrency will remain resilient despite the Fed’s tightening monetary policy. Finally, the analyst added:
“Risk-to-reward may turn towards responsive, tactically focused sellers, and around $25,000 in Bitcoin marks significant resistance. Cryptos need to show sustained strength amid concerns that 2022 risk-asset lows may not bottom.”
Grayscale CEO updates market outlook
Grayscale CEO Michael Sonnenshein said that the worst of the crypto markets is probably behind and cryptocurrencies are showing signs of separation from traditional stocks. In a new interview with crypto analyst Scott Melker, Sonnenshein says the contagion from the FTX crash and other crypto industry setbacks is no longer anything to worry about.
He also says that while stock markets are fluctuating, crypto prices remain in a relatively narrow value channel, suggesting that they may begin to outperform traditional financial markets. In his statement he said:
“To be honest, what we’re seeing again in equity markets right now combined with volatility again, I’m not sure where the rates are headed, but I think I’m starting to see how crypto is holding up in a pretty tight band from a price point.”
The Grayscale CEO says it’s not clear if the coin will return to all-time highs anytime soon, but relative price stability could ensure a healthier crypto industry overall.
Sonnenshein also says he is excited about ordinal numbers, the new crypto use case. Sequential Inscriptions are cryptocurrencies similar to NFTs written on a satoshi, the lowest value of a Bitcoin (BTC). Finally, the analyst said:
“Well, definitely one thing that has been accelerating in the last few months is the idea of ordinal numbers, which I think is very interesting. I continue to be impressed as an industry continues to unlock new uses for crypto.”
Called important crusher for Bitcoin
The crypto analyst identifies an important price zone that Bitcoin (BTC) must break for the uptrend to continue. Crypto analyst Michaël van de Poppe warned his 650,000 Twitter followers that the $23,800 price zone is a “significant breaker” for BTC markets to continue to rise.
cryptocoin.com BTC is currently trading at $22,419, hovering just above another key price level highlighted by Van de Poppe. The analyst said in a statement:
“The game for Bitcoin is expected. It failed to break the resistance and altcoins started falling hard. If Bitcoin doesn’t hold $23,200, I assume we’ll be testing mid-$22,000 before moving on to any bullishness.”
Van de Poppe also warns that if BTC continues on its current downward trajectory, down 1.62% daily, this will negatively impact altcoins like Chainlink (LINK). Analyst thinks retracing higher levels will trigger another rally.
Looking at events in the broader markets, such as potential and unconfirmed Silvergate bankruptcy at the time of writing, Van de Poppe assumes that there may be a time of contraction in the market.
“Silvergate potentially goes bankrupt and drives prices down a bit. On the other hand; People are piling on positions since the news and there is no real movement in Bitcoin. This may be an assumption that people have largely skewed to the short side here. Now it’s time to squeeze in.”
Suggested to reduce risk if price drops
Matrixport, a crypto exchange and lending platform, said that cryptocurrencies have been bullish since mid-December, but signals from the US economy are now forcing it to be more cautious. In a research report published earlier on Friday, the firm said it was still not time to go all downhill, but suggested that the risk be reduced by 50% if Bitcoin (BTC) prices drop below $22,800.
The largest cryptocurrency by market cap crashed overnight and was trading around $22,400 at the time of publication. In the note, it was stated that US stock markets started to sell again and US bond yields rose. 2-year Treasury is currently yielding around 4.87%, above November 2022 high of 4.8%, and the difference or spread between 2-year and 10-year returns is ‘an unhealthy level of -0.87%’ .
Daily crypto trading volumes have dropped from around $80 billion to $60 billion, indicating less interest from traders in the crypto market, while continued outflows from the ‘Paxos-Binance (BUSD) stablecoin have resulted in its market cap currently falling to $10 billion.’ said.
The report noted that the 60-day correlation between Bitcoin and the Nasdaq stock index is at its lowest level since December 2021, when the US Federal Reserve first started to inform the market that rate hikes were on the horizon. Matrixport said it is convinced that US inflation will fall sharply this year, and as a result, the Fed will stop raising interest rates to prepare the market for a relief rally.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.