On Monday, April 25, the bitcoin exchange rate dropped to $38.2 thousand for the first time since March 15. As of 13:50 Moscow time, the cryptocurrency is trading at $ 38.5 thousand, over the past day it has fallen in price by 2.9%.
The crypto market is in a state of high uncertainty, said Roman Nekrasov, co-founder of the ENCRY Foundation. According to him, high inflation risks generally contribute to the influx of investments into the crypto market (and, in particular, into bitcoin), since its ability to hedge inflation attracted institutional investors in 2020. On the other hand, market participants expect the US Federal Reserve to raise the interest rate at the May meeting by 50 basis points, which will restrain inflation in the US, and therefore increase the attractiveness of the dollar as a means of preserving value, while interest in shares of high-tech companies, on the contrary, will decrease.
"Given the high correlation of bitcoin with the stock market and the high-tech Nasdaq index, expectations of a rate hike by the US Federal Reserve are putting pressure on the bitcoin exchange rate. For this reason, the cryptocurrency could not gain a foothold above $ 40 thousand, and after the current decline to $ 38 thousand, when positions of about $ 300 million were liquidated, bitcoin risks continuing the bearish trend and falling by another couple of thousand," Nekrasov warned.
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According to him, now the support level has dropped to $ 35 thousand. The expert did not rule out that in the next two weeks we will see bitcoin fall to this level. Leaving below Nekrasov assessed as unlikely.
The head of the analytical department of AMarkets, Artem Deev, also expects a decrease in bitcoin. According to him, the cryptocurrency will be in the range of $32-43 thousand for a long time.
Deev recalled that crisis manifestations are intensifying in the global economy — an increase in inflation in developed countries, a slowdown in industrial production and demand in China due to another outbreak of COVID-19, a break in logistics and industrial chains against the background of sanctions from the United States and the EU against Russia (while the consequences of coronavirus restrictions in 2020-2021 were not safely resolved). Against this background, investors (institutional, first of all) prefer to look for protective instruments, reducing investments in risk.
"In the near future, we should expect a decrease in the value of bitcoin to the level of $ 32 thousand with short—term rebounds - up to $ 35-38 thousand. But the asset may not return to the level above $ 40 thousand in the coming months — there are no serious fundamental factors for this yet," Deev warned.
Nekrasov added that bitcoin still has a chance to make a breakthrough and overcome the $40 thousand mark if the US consumer prices show strong growth again in May, despite the efforts of the Fed. In this case, it is also possible to increase the price of cryptocurrencies to $ 50 thousand, the expert believes.
Experts predicted the collapse of the bitcoin price. When will the correction end.
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