Experts weigh Bitcoin’s odds of falling to $25,000

The current technical picture does not favour Bitcoin, but the cryptocurrency may still have a chance to resume its rally, according to experts surveyed by ForkLog.

The trajectory of digital gold is being pressured by negative fundamentals, according to Yuri Mazur, head of data analytics at CEX.IO Broker. He split them into global factors — for example, a gradual unwinding of easy monetary policy — and industry-specific pressures — the crackdown by Chinese authorities on the crypto industry.

“Positive news generated within the industry is clearly insufficient. Recall the recent history with Bitcoin’s adoption in El Salvador, where authorities ultimately faced problems building a financial infrastructure – World Bank and the IMF.”

The director for Binance in Eastern Europe, Gleb Kostarev, said that the earlier catalyst for the decline in crypto prices was the U.S. Federal Reserve’s signals about tightening monetary policy at the end of 2022.

“After the crisis caused by the pandemic, the weakness of the U.S. dollar became an important driver of Bitcoin’s ascent. However, the recent jump in the dollar’s value pushed crypto assets down. Further strengthening of the dollar would lead to another drop in digital assets, including Bitcoin,” Kostarev explained.

The market was also weighed down by an initiative by Chinese authorities — banning banks from participating in cryptocurrency transactions.

“Many banks and payment systems are planning to monitor transactions to block such operations. Against this backdrop, some Asian traders began selling, which affected price movements,” Kostarev added.

Mazur did not exclude that Bitcoin’s price could move toward $25,000, and in the absence of positive triggers it would seek balance near that level.

“However, a recovery to $35,000 is also possible. For now, there’s no need to dramatize the situation, but if the price remains below $30,000 by the end of the week, the negative scenario is more likely to unfold,” the analyst said.

The $30,000 level is the most important milestone for Bitcoin, where bulls and bears fought. Exante’s lead strategist Yanis Kivkulis suggests Bitcoin is highly likely to return to this psychological threshold.

“Although bears have managed, with each new dump, to push Bitcoin lower, the task becomes harder each time. On May 12 the price was $57,000, on May 14 it was $48,000, on May 24 it was $32,400, on June 9 it was $31,700, and on June 22 it was $31,300. In other words, if in May the price was knocked down by almost 40%, in June it was down by only about 3%,” the expert said.

Kivkulis reminded that a similar sequence of bear dumps occurred from September to December 2019, when digital gold fell from $10,000 to $6,600:

“The December low was the last in the sequence, and Bitcoin soon returned to a sustainable rise. It is not ruled out that we are seeing a similar pattern now. And the fact that the depth of declines has hardly changed may indicate a shortage of sellers.”

The strategist noted that each collapse is used by investors to buy.

“If the next one or two dumps do not break the situation, one could even expect the return of a bull market,” the expert said.

According to Denis Voskvitsov, head of Exantech’s data centre, MicroStrategy’s purchase of Bitcoin for another $500 million did not become a catalyst for a market reversal and only temporarily slowed the decline.

“Market participants took this event as a desperate and unsuccessful attempt to push prices higher,” the expert explained.

At the same time, Voskvitsov bet on retail investors:

“During the period of market volatility, a substantial layer of investors who adhere to a ‘buy on dips’ strategy has emerged. There could be so many of them that they prevent a market crash. Where those dips lie is another very difficult question.”

According to him, the past few years have shown that “being a bear is very expensive.” The current cycle also remains undecided: the market always tries to outpace entrenched price patterns.

Denis Voskvitsov added that if most investors are waiting for a crypto winter, the market could move in a completely different direction.

“Bitcoin adoption at the government level has only begun; the Fed and the [simple_tooltip content=’Европейский центральный банк’]ECB[/simple_tooltip] are busy with other matters. Crypto havens will only gain in popularity, and it is quite possible that there are still sizable chances for a substantial rebound,” he noted.

Outlook for altcoins remains skeptical, according to experts.

“Although in the early days after Elon Musk’s criticism of Bitcoin it seemed that more ‘eco-friendly’ altcoins (especially Ethereum and PoS blockchains like Cardano) would live their own lives, subsequent events collapsed the entire market and showed the persistent dependence of altcoins on the market’s flagship,” commented Yanis Kivkulis.

According to the strategist, the current bear market revolves largely around Bitcoin:

“Many other currencies, including Ether, largely repeat its pumps and dumps, albeit with higher volatility.”

Denis Voskvitsov also believes that altcoins “follow the benchmark coin blindly,” and the further they go, the less independent they will be. The expert suggested that in the future the Bitcoin dominance index will rise.

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