"The overall backdrop remains negative. When will bitcoin sideways end
Experts told how long the first cryptocurrency will trade in a narrow range and in which direction its price is then more likely to move
Bitcoin has continued to trade in a relatively narrow range since mid-June 2022. During this time, the cryptocurrency has fallen to a local low of $17,600 and climbed to $25,200 at its peak. Most of the rest of the time, the asset is near the $20,000 and $19,000 marks. As of October 12 at 15:50 time, bitcoin is trading at $19,000.
Flat on bitcoin continues amid uncertainty among market participants about the further steps of the world's Central Bank on monetary policy, explained a leading analyst at 8848 Invest. He recalled that while the U.S. Federal Reserve continues to tighten monetary policy by raising the rate, the central banks of the UK and South Japan were the first to return with a temporary program of quantitative easing to prevent the collapse of the economy.
"The trend to return to a soft monetary policy would support cryptocurrency prices and allow capitalization to grow, but so far from the same Fed market participants expect another rate hike at the next meeting, and the next high value of inflation at the end of the month, which generally puts pressure on the stock and cryptocurrency markets," the expert stressed.
The general background in the markets remains negative, this is due to rising inflation in developed countries and the general expectation of a full-scale recession of the world economy, the head of the analytical department of AMarkets added. According to him, under such conditions, investors leave the risk, moving into protective assets.
"Therefore, there are no fundamental factors for a fundamental reversal of bitcoin and cryptocurrencies as a whole now and in the medium term," the expert warned.
likely decision of the U.S. Federal Reserve on the next rate hike will lead to a new phase of bitcoin decline, which can break through the level of $14 thousand and continue to decline with short-term and weak rebounds.
Deev predicted that bitcoin will be sideways in the $18-20 thousand range until the end of October, but after the Fed's decision on November 2, we can expect the cryptocurrency to fall into the $14-17 thousand area.
A different opinion is held by 8848 Invest's lead analyst. He agreed that after the Fed's rate decision, we should expect increased volatility and a likely bitcoin to update the annual low. However, the expert then predicts the cryptocurrency will return to growth.
"The fourth quarter in the crypto market is a historically positive time for bulls, so I think prices will return to growth after a local drop in prices with BTC updating its annual low. I don't expect cryptocurrency prices to fall relentlessly until the end of this year: now there is a large margin buying position on the market, which can be shaken out of the market by a sharp decline, and after that, on the background of increased purchases by institutions, go back to growth," the analyst claims.
He concluded that bitcoin price below $18 thousand is "ruinous" for mining in the mid-term, so the market "vitally needs" to defend the levels of $19-18 thousand.
The period of stagnation of the crypto market can last a year and a half or two years, added a senior Bestchange analyst. He explained that there is some balance between speculators and long-term investors. In this case, the expert does not exclude the likelihood of cryptocurrency falling to $15-20 thousand or $10-15 thousand in a negative scenario.
The analyst says that the current price level, or slightly below the current range, will be observed until mid-2023. The analyst does not expect any reversal of the global trend before that date.