Bitcoin
Will Bitcoin Recover? Here’s Where Five Experts See the Price Heading Next – DL News
Bitcoin’s plunge has seen it fall below $55,000, below its 200-day simple moving average.
The slowdown comes as Mt. Gox has begun paying customers after a decade-long bankruptcy process that was expected to see the return of about 9 billion dollars in Bitcoin.
The new inflow comes as market watchers expect German government to sell their Bitcoin holdings, which will also weigh on the markets.
So how bad will the crisis be?
That’s what the experts say.
David Brickell of FRNT
David Brickell, FRNT’s head of international distribution, said DL News It’s hard to say how far Bitcoin will fall.
Still, he sees signs that the crisis could change.
Macro factors “are aligning positively, with the dollar falling and yields reversing lower on expectations of Fed rate cuts and improved liquidity as major central banks adopt an easier policy stance,” Brickell said.
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Several factors suggest a turnaround.
“This latest flush may be enough to attract dip buyers who have been left out but remain bullish for the long term and could very well kickstart the next leg of the bull market,” Brickell said. “Bulls will be watching.”
Rachel Lin of SynFutures
Rachel Lin, co-founder and CEO of decentralized cryptocurrency derivatives exchange SynFutures, said Bitcoin’s decline is due to market expectations that Mt. Gox users will dump their tokens,
But “we could see a recovery if sales are lower than expected,” she counted DL News.
Lin added that it is possible that the price of Bitcoin could fall further: “If there is enough selling to push the price lower, we could be looking at the $50,000 level soon.”
Brad Howell from Keyrock UK
Negativity about the potential impact of Mt. Gox’s $9 billion plunge on the market may just be sentimentality.
That’s according to Brad Howell, managing director of cryptocurrency market maker Keyrock UK.
“We have to put this into perspective,” Howell counted DL News earlier this year.
Bitcoin averaged $30 billion in daily trading volume in March, and the market processed $72 billion in volume when Bitcoin fell 8% on March 19, Howell said.
“That should give you an idea of the volume needed to move a market of that size,” he said.
Howell also said he did not expect Mt. Gox creditors to sell their assets as they are likely early adopters of the technology and are more likely to hold onto their Bitcoins.
“Don’t expect large volumes to be dumped on day one,” he said.
Adam Morgan McCarthy of Kaiko
Adam Morgan McCarthy, an analyst at digital financial data firm Kaiko, said Bitcoin’s liquidity over the summer will play a major role in its price action.
“Liquidity tends to dry up during the summer months. We can already to see this is happening,” he said DL News.
“This means there is less support when there is selling pressure and prices can move more sharply. I expect this to continue through July, August and September.”
Jacob Joseph of CCData
CCData research analyst Jacob Joseph said DL News there are reasons to be optimistic, “despite the current challenges”.
He cited growing cryptocurrency adoption among institutional players — for example, through spot Bitcoin exchange-traded funds — and the U.S. election “serving as positive catalysts” for a rally.
In the US, both President Joe Biden and possible Republican candidate Donald Trump have taken an interest in cryptocurrencies.
Joseph said he will be mindful of seasonal effects in the summer, which typically result in lower institutional trading activity.
He will also keep an eye on key macroeconomic factors, including the inflation rate and the Federal Open Market Committee meeting later this month, for further clues.