When planning any investment, whether short-term or long-term, it is necessary to consider its technical arguments in the context of the fundamental background. Undoubtedly, this year's strengthening of Bitcoin, reaching over 100%, has made the king of cryptocurrencies a tempting target for long-term investors counting on the continuation of the trend and a return to even 45,000 usd Are such assumptions realistic?
As for the economic background, definitely yes. The worldwide slowing inflation, record low unemployment rate in the USA, and recession in the background should prompt the Fed in the near future to flood the markets with cheap cash, which will reach the market, driving stock indices to new highs. Meanwhile, investors seeking riskier assets will turn their attention to the cryptocurrency market, which should lead to a snowball effect, and stronger growth will drive hordes of new investors dreaming of wealth.
This is, of course, a very optimistic scenario, but realistically speaking, the level of 30,000 usd should be a barrier for now, and any attempts to reach 33,000 usd, in my opinion, will be quickly extinguished by supply, at least until the next FOMC meeting, but not the one in May. On that meeting, besides raising rates by 0.25pb, we will not learn the answer to the question of whether we can expect rate cuts this year.
Anyway, will the bull market return to crypto? Probably yes, but not yet. I think the third quarter is more realistic when it comes to such predictions. By then, I would expect a correction to around 25,000 usd Setting the entire upward move initiated on March 10, whose peak so far fell on April 14, and which we are now measuring with a correction, I would propose a conservative approach to the contrarian strategy of looking for a trend reversal after removing 30% of the entire move defined in the aforementioned period.
Under such an assumption, we should expect an acceleration of declines after breaking through 27,500 usd. This should devalue the Bitcoin rate to at least 25,000 usd where one could expect a longer consolidation and a possible further upward move. Of course, it should be remembered that in the end, those who try to predict the future build on sand. However, this is one of the possible scenarios to be played out.
As for the economic background, definitely yes. The worldwide slowing inflation, record low unemployment rate in the USA, and recession in the background should prompt the Fed in the near future to flood the markets with cheap cash, which will reach the market, driving stock indices to new highs. Meanwhile, investors seeking riskier assets will turn their attention to the cryptocurrency market, which should lead to a snowball effect, and stronger growth will drive hordes of new investors dreaming of wealth.
This is, of course, a very optimistic scenario, but realistically speaking, the level of 30,000 usd should be a barrier for now, and any attempts to reach 33,000 usd, in my opinion, will be quickly extinguished by supply, at least until the next FOMC meeting, but not the one in May. On that meeting, besides raising rates by 0.25pb, we will not learn the answer to the question of whether we can expect rate cuts this year.
Anyway, will the bull market return to crypto? Probably yes, but not yet. I think the third quarter is more realistic when it comes to such predictions. By then, I would expect a correction to around 25,000 usd Setting the entire upward move initiated on March 10, whose peak so far fell on April 14, and which we are now measuring with a correction, I would propose a conservative approach to the contrarian strategy of looking for a trend reversal after removing 30% of the entire move defined in the aforementioned period.
Under such an assumption, we should expect an acceleration of declines after breaking through 27,500 usd. This should devalue the Bitcoin rate to at least 25,000 usd where one could expect a longer consolidation and a possible further upward move. Of course, it should be remembered that in the end, those who try to predict the future build on sand. However, this is one of the possible scenarios to be played out.