{"id":71708,"date":"2022-12-20T15:40:00","date_gmt":"2022-12-20T13:40:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=71708"},"modified":"2025-09-08T10:38:22","modified_gmt":"2025-09-08T07:38:22","slug":"nansen-warns-of-risks-of-continued-bearish-momentum-in-cryptocurrencies","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/nansen-warns-of-risks-of-continued-bearish-momentum-in-cryptocurrencies\/","title":{"rendered":"Nansen warns of risks of continued bearish momentum in cryptocurrencies"},"content":{"rendered":"<p>The baseline scenario for 2023 envisages a recession in the United States and a new wave of sell-offs in the stock market. In these conditions, cryptocurrencies would be subject to negative re-pricing, Nansen warned.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Read more: <a href=\"https:\/\/t.co\/2wMUlSIU2h\">https:\/\/t.co\/2wMUlSIU2h<\/a><\/p>\n<p>\u2014 Wu Blockchain (@WuBlockchain) <a href=\"https:\/\/twitter.com\/WuBlockchain\/status\/1605037755519860736?ref_src=twsrc%5Etfw\">December 20, 2022<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>According to analysts, the situation could be changed only by a <span data-descr=\"U.S. Federal Reserve\" class=\"old_tooltip\">\u0424\u0420\u0421<\/span> lowering of interest rates.<\/p>\n<p>Experts doubted that the peak of the US dollar\u2019s strength\u2014associated with risk-off and a fall in cryptocurrency values\u2014had been reached. They linked the current weakness of the US currency to a <a href=\"https:\/\/forklog.com\/en\/news\/bitcoin-hits-18000-as-us-inflation-data-are-released\">sharp drop in inflation<\/a> and expectations that Chinese authorities would abandon their zero-COVID tolerance policy.<\/p>\n<p>According to observations, the US bond market signals that by May 2023 the Federal Reserve could raise the rate to 4.84% and, in the second half of the year, cut it by 40 basis points.<\/p>\n<p>In Nansen they reminded that such notions<a href=\"https:\/\/forklog.com\/en\/news\/bitcoin-slips-below-18000-as-fed-raises-rates\"> contradict<\/a> the character of Fed Chair Jerome Powell&#8217;s speeches. Central bank officials emphasised the strength of the labour market and the risks of insufficient tightening ahead of inflation threats.<\/p>\n<p>Specialists tested the dollar index (DXY) and PMI models, which have a strong correlation. They concluded that the US currency is likely not yet peaked given the absence of a strong cooling of the economy.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/storage.googleapis.com\/nansen-alpha-portal-strapi-storage-prod\/A3_pmi_dxy_e474af1423\/A3_pmi_dxy_e474af1423.png\" alt=\"Figure A.3. PMI Indicator (Final forecast on GBP and EUR forecast - US ISM forecast) vs DXY\"\/><figcaption>Data: Nansen.<\/figcaption><\/figure>\n<\/div>\n<p>The hypothesis that crypto investors would capitulate, which could signal the end of the bear market, did not hold either. For this purpose, analysts analysed an index based on the volatility of Bitcoin and Ethereum put- and call-options, as well as their risk-appetite indicator for the \u201csmart money\u201d.<\/p>\n<p>The latter moved into the \u201crisk-on\u201d zone in May 2022, while the former remained on the opposite side.<\/p>\n<p>In conclusion, the analysts drew parallels between digital asset markets and equities given the increased correlation between them since 2021. The normalization of the risk premia between these asset classes in 2022 heightened the metric\u2019s predictive power.<\/p>\n<p>Experts noted that in 2008 and 2020 the equity risk premium rose to 20% with an average above 5%. Currently, the metric fluctuates in the 8\u20139% range.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/storage.googleapis.com\/nansen-alpha-portal-strapi-storage-prod\/c15_erp_5a9f8d4459\/c15_erp_5a9f8d4459.png\" alt=\"Figure C.15. S&#038;P 500 Equity Risk Premium (ERP) based on option pricing\"\/><figcaption>Data: Nansen.<\/figcaption><\/figure>\n<\/div>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cIn the base scenario, ERP will be much higher, [\u2026], which would push CRP higher. Therefore cryptocurrency prices will experience a new (and the last?) wave of declines in this cycle, before financing conditions become more favourable for both asset classes,\u201d<\/em> the specialists concluded.<\/p>\n<\/blockquote>\n<p>As reported, former BitMEX CEO Arthur Hayes said that <a href=\"https:\/\/forklog.com\/en\/news\/arthur-hayes-says-bitcoin-has-bottomed\">Bitcoin has bottomed out<\/a>, as nearly all \u201cirresponsible\u201d organisations have run out of BTC to sell.<\/p>\n<p>Earlier, Galaxy Digital founder Mike Novogratz repeated his forecast for the price of the first cryptocurrency to reach the <a href=\"https:\/\/forklog.com\/en\/news\/mike-novogratz-reiterates-forecast-that-bitcoin-will-reach-500000\">$500,000<\/a> mark.<\/p>\n<p> Read ForkLog&#8217;s Bitcoin news on our <a href=\"\/\/telegram.me\/forklog\u201d\" target=\"\u201c_blank\u201d\" rel=\"\u201cnofollow\u201d noopener\">Telegram<\/a> \u2014 cryptocurrency news, prices and analytics.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The baseline scenario for 2023 envisages a recession in the United States and a new wave of sell-offs in the stock market. In these conditions, cryptocurrencies would be subject to negative re-pricing, Nansen warned.<\/p>\n","protected":false},"author":1,"featured_media":71709,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[480,1145,1648],"class_list":["post-71708","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bitcoin-price","tag-market-analysis","tag-nansen"],"aioseo_notices":[],"amp_enabled":true,"views":"16","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/71708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=71708"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/71708\/revisions"}],"predecessor-version":[{"id":71710,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/71708\/revisions\/71710"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/71709"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=71708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=71708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=71708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}