After the U.S. Federal Reverse raised the interest rate by another 75 basis points and warned of a further increase in a future meeting, the crypto market took a wide ride last week with an initial rally across the market before falling back down.
Bitcoin found itself at a three-month low of $18,000 before bouncing back to $19,000 at the beginning of the week, according to CoinMarketCap’s record.
While the market this week has given way to a degree of calm, the forecast on the price of Bitcoin remains murky. The crypto market is inundated with mixed opinions. Several crypto analysts warned that Bitcoin could be poised to decline further.
A Falling Bitcoin Price
Tone Vays, the crypto analyst and former JP Morgan executive, said in the latest strategy session that it could be possible that the world’s top cryptocurrency would soon enter a capitulation phase within the next two weeks.
In other words, Vays expected a dramatic surge of selling pressure in the market dominated by the bears. Explaining his call, the analyst pointed out Bitcoin’s four-day chart, suggesting sustaining short positions.
Vays predicted that Bitcoin could plunge even further to a low of $15,000. On the other hand, the imminent capitulation of Bitcoin likely presents a silver lining for a bull run.
“I think we’re going to go to a second consecutive MRI buy, and then all the stars and the moon will align… We already have a monthly MRI buy on Bitcoin. We’ll have a monthly MRI buy next month in the stock market… The weekly MRI buy won’t come in three weeks, so that’s going to align as well. So sometime in early October, we should align with everything…If we crash down to $14,000, $15,000 in Bitcoin, everything will align with the MRI for the perfect buying opportunity.”
Bitcoin is traded at the $19,000 price area at the press time, however, unlike Vays’ forecast, many investors hope for a minor recovery for Bitcoin. Given the outlook of Bitcoin, the next target is expected to be the $20,000 mark.
A Wild Market
Volatility remains in place and Bitcoin struggles to get away from the bear market. After another interest hike rate, which in fact met investors’ expectations, Bitcoin, the SNP, NASDAQ, and Dow Jones sparked a major weekly drop, throwing traders and investors off guard.
The key factor that contributed to the red wave is Fed’s plan for 2023, which outlined all the rate hikes projected by the FOMC. Following Fed meetings probably see further interest rate hikes expected to peak between 4.25% and 5% next year.
These figures, however, extend beyond pre-meeting expectations of 4% to 4.75%. Furthermore, the majority of committee members are expecting rate hikes to be biased toward the upper half in 2023, another big deviation from market expectations.
There is a proven correlation between tech stocks and the value of Bitcoin. As the tech stocks have drastically declined, Bitcoin will suffer devaluation, crypto analyst Nicholas Merten said in a new video.
Intense pressure from the continuous hike rate pushed Bitcoin down below $20,000, Jan Happel and Yann Allemann stated in Glassnode’s latest newsletter.
The co-founders of Glassnode said that Fed’s efforts to curb inflation are standing in the way of crypto growth. This factor, together with bearish momentum, results in more pain for Bitcoin.
Data from Santiment shows a decline in the number of BTC in whales’ balance for 10 months. This is evident that fears of increased inflation and macro backdrop accelerate, making investors holding 100 to 10,000 BTC shift part of their balance to safer assets.
While we are likely closer to the bottom of the market than the top, forming a bottom may take years. The Bitcoin price is still high by historical standards.