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Bitcoin, ethereum and other major cryptocurrencies have swung wildly over the last few weeks as the Federal Reserve’s increasingly hawkish stance puts pressure on markets—with a dogecoin break out taking traders by surprise.
The bitcoin price has bounced around $40,000 per bitcoin through April, failing to find firm ground above the closely-watched level. The ethereum price is meanwhile hovering above $3,000 per ether even as a long-awaited ethereum upgrade was again pushed back this week.
Now, after one crypto exchange founder warned of coming “crypto carnage,” the chief executive of crypto lending company Nexo has issued a huge crypto price prediction, with a crypto analyst describing the market as “at a critical juncture.”
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The bitcoin price has struggled to find support above $40,000 per bitcoin as the ethereum price … [+]
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The bitcoin price could soar above $100,000 “within 12 months,” Nexo’s Antoni Trenchev told CNBC this week, adding a stock market “crash” would likely force the Fed “back to easing in no time.”
In January 2020, Trenchev made a bitcoin price prediction of $50,000 by the end of the year that fell short by just two months. “Everybody was laughing me out,” he added. The bitcoin price surged above its previous all-time high of $20,000 in December 2020, reaching $50,000 in February 2021.
Despite his bullish long-term bitcoin price prediction, Trenchev is “worried” the bitcoin price could fall back in the coming months, dropping along with traditional markets as the Fed tapers its unprecedented Covid-era stimulus program and begins to raise interest rates.
Trenchev’s warning echos other crypto market watchers who fear the latest cryptocurrency bull market could be over.
“Even though multiple Fed members have continued to voice support for more monetary tightening this week, the market’s inflation expectations have not notched lower and are continuing to fluctuate sideways at high levels,” Yuya Hasegawa, crypto market analyst at Tokyo-based bitcoin and crypto exchange Bitbank, wrote in an emailed note.
“The push and pull between inflation hedge and tighter monetary policy will likely continue to force bitcoin to fluctuate within a range.”
This week, data showed the U.S. consumer price index rocketed by 8.5% in March, the highest rate in four decades, with the White House warning inflation is “extraordinarily elevated.”
As the Fed grapples with inflation, bitcoin and crypto traders are eyeing key support levels to better understand where the market could be headed.
“Bitcoin is trading near the support level, which runs through the lows of January, February and March,” Alex Kuptsikevich, senior financial analyst at FxPro, wrote in emailed comments. “A formal signal to break the support will be considered a failure under the previous lows in the $38,000 per bitcoin area. The ability to develop a reversal to the offensive from these levels, on the contrary, will reinforce the importance of this moderate uptrend line.”
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The bitcoin price has seen extreme volatility over the last year, with the price soaring to an … [+]
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However, the bitcoin price decline over recent weeks shows March’s Russia momentum has faded.
“The falling price of bitcoin, which now stands below $40,000, has prompted many to wonder if the cryptocurrency bull market that began early March is indeed over,” William Lee, chief researcher at Huobi Research Institute, told Insider.
“The market is at a critical juncture, and this will determine the future price direction of bitcoin. From a macro perspective, it was the Russia-Ukraine war, and its currency substitution effect, that led to the rise in bitcoin’s price in March, as many citizens exchanged their Russian ruble for bitcoin to mitigate the effects of the ruble’s devaluation and sanctions from the United States and European Union.”
Source: Forbes
