Since the beginning of the year, the capitalization of digital currencies has decreased by 60% to $934 billion. The coming “crypto winter” brought down the price of bitcoin by 70% from the historical maximum of $ 69 thousand.
The tokens of metaverse and NFT projects, as well as the currencies of DeFi platforms, suffered the most – coins have lost from 70% to 85% of their value since the beginning of the year. Cryptocurrencies of exchanges fell the least: their quotes fell by 46%-57%.
Since mid-June, the bitcoin exchange rate has fluctuated between $18 thousand-$22 thousand. Due to the drop in quotations, some institutional investors and credit crypto platforms have already faced financial problems, and mining companies are forced to sell all mined bitcoin to cover operating costs.
Is there any potential for bitcoin to grow in the near future, or is there a real reversal in the market yet to come? The experts of RBC-Crypto described the current price dynamics in the cryptocurrency market and told when a turning point could occur.
Bitcoin Price Dynamics
The current week “pleases” traders with increased volatility, says Andrey Podolyan, CEO of Cryptorg. According to him, after bitcoin went below $19 thousand on July 13, the panic was very strong.
If we consider the BTC chart from the point of view of technical analysis, then “the price is in a horizontal channel with a width of about $ 4 thousand,” Podolyan explained. The analyst added that approximately the same channel was formed in May — June, and as a result, the price “failed” a lot.
Now there are already a lot of touches on both the upper and lower sides in the new channel, so it is highly likely that the exit from the channel will occur in the next couple of weeks, the expert suggested. He said that on July 13, the price “pushed off” from the lower edge, that is, we can hope for continued growth to the upper edge.
The expert noted that there is complete synchronization with the S&P 500 index, the dynamics of bitcoin and other top cryptocurrencies directly depend on its movement now. A breakdown of the horizontal channel up will open the target to the levels of about $26 thousand, and a breakdown down will open the target of $16 thousand, Podolyan said.
Influence of external factors
The most likely negative scenario, which implies a drop in the entire crypto market, and bitcoin — up to $ 15 thousand in the coming month, said Roman Nekrasov, co-founder of the ENCRY Foundation.
According to him, cryptocurrencies are considered as one of the instruments that hedge inflation risks. But on the other hand, digital assets are now strongly correlated with the stock market, and it will inevitably show a fall due to high inflation in the United States, despite all the efforts of the Fed to contain this growth, the expert warned.
According to Nekrasov, most likely, at the next meeting of the US Federal Reserve it will be decided to raise the key rate again. This is already obvious, and on the eve of the meeting, capital will begin to exit high-risk assets, the analyst is sure.
In August, bitcoin will fall to multi-year lows, but this does not cancel the forecast for bitcoin growth in the future for 3 years, bitcoin will return to growth in the fall, Nekrasov added.
The expert suggested that in the second half of 2023, a new bullish cycle will begin on the eve of the next halving. And bitcoin will update new historical highs within 12 months after it — in the period from May 2024 to May 2025, Nekrasov is sure.
“In any case, the coming year will be difficult for the entire global economy, and the crypto market is no exception. Now crypto investors should be patient and valerian,” Nekrasov admitted.
Intermediate bottom
In the near future, we expect mainly a sideways movement with the risks of another update of the annual minimums for BTC, ETH and some other capitalized assets, says Viktor Pershikov, a leading analyst at 8848 Invest.
Such dynamics are unlikely to lead to a significant drop in quotations, and new lows will allow market participants to enter assets more profitably, the expert explained. He announced the expectation of a sharp recovery in prices after a possible drop in BTC to $ 17 thousand, and ETH to $ 900.
By the end of July, an intermediate bottom will be formed on the crypto market, which will allow cryptocurrencies to strengthen within 2-3 months, Pershikov is sure. But the CFA expert does not advise rushing with purchases.
“It is likely that the current dynamics will continue until the end of the month, while growth in individual assets and in the market as a whole will begin in August,” the analyst believes.
