Some time ago we asked InstaForex analyst to comment on the leading cryptocurrency, which, in the past few weeks, seemed to be impressively stable. Have all events of 2022 resulted in BTC holding at $16,000 for ever?
Last week, the cryptocurrency market was trading downwards along with the S&P500 which was unable to sustain momentum and plunged to 3,825 from 4,100. BTC, in turn, returned to $16,000, and its fall was capped at this level.
There is no definite answer to this, because there is no bottom as it is. Whatever steep fall an asset experiences, it can decline even lower depending on the circumstances.
To start with, in late November, the quotes neared the level of $15,000. Speaking of BTC support,this level could be considered.
Massive FUD
Year to date, the cryptocurrency market has experienced several massive FUD’s:
• A crash of UST algorithmic stablecoin and LUNA token
• Bankruptcy of crypto lending company Celsius Network
• BNB Smart Chain hack
• Bankruptcy of FTX, one of the largest crypto exchanges, and arrest of its founder Sam Bankman-Fried.
However, the cryptocurrency market did not experience any major changes despite these negative factors. It means that we may never see Bitcoin’s “death” which many experts foretold for over 466 times in 12 years of its existence.
In fact, we are witnessing the sturdiness at its finest. The cryptocurrency market frequently falls under various limitations, experiences massive FUD’s, but continues rising nonetheless.
Therefore, if the current FUD is unable to crash the crypto market, why would Bitcoin be unable to hit a new all-record high in X-period of time.
It all depends on the global economic development and stability of the US stock market. Financial markets should turn to the upside to revive interest of buyers of risky assets, and cryptocurrencies are risky assets.
The Federal Reserve is the main driving force for the US stock market. As long as the Fed keeps a tough monetary policy stance, markets are unable to develop any sustainable growth.
Read next: Reversal Of Fed Policy May Prove Crucial For Bitcoin's Moves| FXMAG.COM
Investors and traders are eager to get any clear hints from the Fed, such as taming the inflation, the end to the rate hikes cycle, and a possibility of quantitative easing if such a measure becomes justified by the economic conditions. All these factors can fuel a rise in the US stock market, which will also boost the cryptocurrency market in whatever condition it were.
It’s been a month already since bitcoin has hit a swing low of the medium-term downward trend. It is a clear indication of a downward trend slowdown and a possibility of reversal. At the same time, we cannot state that the reversal is coming soon, because this pause near the bottom can be interpreted in different ways. Specifically, traders may consider it a correction phase as part of a downward trend, or some shift in trading forces. In this case, the current trend is likely to continue if the price holds below $15,000.
According to the bullish scenario, the current slowdown in the downtrend may subsequently turn into a sideways channel, which will form new signals about a possible trend reversal. Simply put, the market may start growing.
As for the price levels, one should pay attention to the level of $18,000 that has been recently hit. Probably, this level may well serve a starting point for buyers in case the price holds above it on a daily chart. The further BTC growth may develop in a ladder style: $18,000 ---> $20,000 ---> $22,000 ---> $25,000 ---> $30,000.
When analyzing the general market capitalization of the crypto industry, we can see a specific consolidation at the bottom. It means that crypto assets no longer fall in price, having reached a notional bottom. Speaking of numbers, this bottom can be estimated at $790 billion - $1 trillion (Total Cryptocurrency Market Capitalization).
As usual, Bitcoin dominated the market, accounting for a 40% share, or $324,109,120,123. Remarkably, the gap between Bitcoin and Ethereum is narrowing.
The Ethereum dominance is 18.4%, while its market cap is $149,068,809,391.
The Crypto Fear & Greed Index has been fluctuating between 20 and 40 points, which signals depression in the market. If the index breaks above 50, a new bullish wave is likely to hit the market.
