Bitcoin may weaken significantly by the level of $ 30,000 by June. Arthur Hayes, co-founder of the BitMEX cryptocurrency trading platform, made a relatively pessimistic estimate of the development of the best-known cryptocurrency, which currently stands at around $ 41,000.
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According to him, one of the reasons is the planned tightening of monetary policy by the US Federal Reserve (Fed) in combination with weaker economic growth.
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“I can’t imagine now that bitcoin will return to its peak of around $ 69,000 and ethereum to five thousand by the end of the first quarter of 2022. On the contrary, I can imagine a confused and boring market with small downward fluctuations followed by a lukewarm recovery, “Hayes said last December, when bitcoin cost $ 50,500 and ethereum $ 4,300.
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And his prediction turned out to be far-sighted, as bitcoin has spent most of this year in a relatively narrow trading zone. Hayes also stated in a recent post that a similar scenario, ie a more pronounced decline, may also encounter the cryptocurrency ethereum. According to Hayes, it could drop to $ 2,500 from the current $ 3,000.
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If Hayes’ estimate were to be fulfilled, it would be a further and much more significant deepening of this year’s losses for both known and popular cryptocurrencies. Bitcoin has been falling by about 11 percent since the beginning of this year, while Ethereum has fallen by more than 16 percent.
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“Personally, I’m not as pessimistic as Hayes. However, it is true that the current market sentiment tends to move to lower areas. In recent days, we have witnessed repeated testing of the $ 40,000 mark, which, despite a shorter break-up, has so far withstood and sales pressure has proved rather weak, “said Martin Kysela, an analyst at Trhy.cz, for SZ Business Business analyst.
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According to Kysela, estimating the longer-term development of the price is currently extremely difficult, as the situation around cryptocurrency assets is significantly affected by the ongoing war and many possible sanctions and restrictions are being discussed that may affect them.
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“However, I do not expect any negative fundamentals to be reflected in the bitcoin by falling below the level of the $ 30,000 discussed in the coming weeks. In the longer term, however, such a short-term decline cannot be ruled out, “the analyst estimates that the exchange rate will develop.
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The expectation that the US Federal Reserve (Fed) will gradually raise interest rates in the coming months has recently burdened the cryptocurrencies as well as the shares of technology companies. The Nasdaq, which includes technology stocks, lost 3.8 percent last week and bitcoin fell shortly below $ 40,000 on Monday – for the first time since mid-March.
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Correlation with technological stocks
BitMEX’s Hayes estimates that the combination of weakening global economic growth and the tightening of monetary policy by the US Fed will further burden technology stocks hand in hand with cryptocurrencies, as both assets are moving almost equally this year.
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Dev The 90-day correlation (movement in the same direction – note. red.) bitcoin with the Nasdaq index is currently at record levels, which reduces the attractiveness of bitcoin as a tool for diversification, “he claims.
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Price development of bitcoin and Nasdaq
“Bitcoin is currently significantly correlated with stock indices, especially the S&P 500 and the Nasdaq. However, this is more of a short-term matter. With a long-term comparison of market trends and a deeper analysis of these markets, we will not find a significant degree of correlation, “says analyst Kysela.
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“It can be said that bitcoin now behaves more like a technology stock and will be more sensitive to stock market fluctuations until it stabilizes significantly at higher price levels,” he added.
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The volume of trade in the Czech Republic decreased
In the first quarter of this year, investors in the Czech Republic traded cryptocurrencies for about 1.1 billion crowns. This is about half less than in the same period last year during the so-called bitcoin fever. Bitcoin and ethereum continue to account for the largest volume of trades, according to data from the Czech company Bit.plus.
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Although trading volumes lagged behind last year, interest began to pick up gradually, due to the gradual rise in the bitcoin to more than $ 47,000 at the end of March. Then, however, there was a noticeable drop to $ 40,000.
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“The bitcoin exchange rate and the interest in trading in March continued to be affected by uncertainty in the markets due to the conflict in Ukraine. To this is added rising inflation and concerns about the regulation of cryptocurrency trading within the EU, “says Martin Stránský, director and founder of the Czech company Bit.plus.
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According to experts, future developments will depend on the further escalation of the conflict in Ukraine and its impact on economic development in the world, such as rising inflation or stock markets.
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