Bitcoin could reach $45,000 in a month in this scenario, analyst says.

This week I caught up with Vetle Lunde, senior analyst at K33 research, who said bitcoin could reach as high as $45,000 within a month if it follows the patterns it saw after the 2018-2019 bear market.

There are many similarities between bitcoin’s year-to-date rally and its recovery trajectory after the 2018-2019 bear market, according to Lunde.

Find me on Twitter at @FrancesYue_ to share some thoughts about crypto, this newsletter, or your personal stories with digital assets.

A famous rally?

For both the last bear market and the one from 2018 to 2019, it took bitcoin about 370 days to bottom from the cyclical peaks, Lunde wrote in a recent note.

Meanwhile, 510 days into both cycles, bitcoin is down about 60% from its previous peaks, according to Lunde.

In June 2019, bitcoin’s bear market rally topped $13,852, 556 days after it peaked in 2017 at $19,752. If the crypto follows a similar pattern this year, it could reach as high as $45,000 around May 20, Lunde noted.

Meanwhile, there was intense fear in the market during both bear markets, Lunde said in a telephone interview.

In late 2018, crypto investors were worried about US regulators’ crackdown on initial coin offerings, and worried that a split of Bitcoin Cash, a fork of the Bitcoin blockchain, would weigh on the price of the largest cryptocurrency.

Similarly, FTX’s collapse last November led many investors to sell their bitcoin or short the cryptocurrency as they anticipated further losses in digital asset prices, Lunde noted.

Later, as the markets slowly and gradually began to climb, people “who were underexposed or maybe even have a short exposure in crypto started to rotate back in,” Lunde said.

To be sure, there are several important differences between today’s market and the market in 2018 and 2019. The crypto market has matured a lot, with less concentration of coin holdings and more institutional participation, Lunde noted. Crypto derivatives markets also became more developed, Lunde said.

In addition, cryptocurrencies other than bitcoin have gained prominence and investors now have more options, according to Lunde.

Moreover, the macro environment has changed significantly. The broader economic environment, which currently looks vulnerable to a recession, didn’t matter as much to bitcoin’s price back in 2018 as it does now, since there was less institutional use of crypto in the past, Lunde noted.

The Federal Reserve has also indicated that it plans to keep interest rates high, currently at 5% at the upper end of the policy range, for some time as it looks to tame inflation after an era of loose monetary policy that helped crypto and other risky assets. assets.

Hoping for consolidation

With recent stress in the US banking system calming down and investors looking ahead to the next Federal Reserve interest rate committee meeting in May, Bitcoin’s price is now primarily driven by technical factors, according to William Cai, co-founder and managing partner of Wilshire Phoenix.

He believes a consolidation in the range of $25,000 and $30,000 will help bitcoin break and hold above $30,000, a psychology level, for an extended period.

Gensler declined to say whether ether is a security

House Republicans criticized the US Securities and Exchange Commission on Tuesday for its oversight of the crypto industry, arguing that the agency’s chairman Gary Gensler has been overly aggressive in taking enforcement action against the industry, while refusing to clearly state which tokens he sees as under its purview. jurisdiction.

“You have refused to provide clarity on whether digital assets … are subject to securities laws and, more importantly, how these firms are supposed to comply with those laws,” Representative Patrick McHenry of North Carolina, the Republican chairman of the House Financial Services Committee, said during an oversight hearing .

McHenry pressed Gensler to say whether ether, the second-largest cryptocurrency by market capitalization, was a security, but he declined to elaborate on a specific digital token. Gensler has repeatedly said that most cryptocurrencies are securities.

Read more in this article by MarketWatch’s Chris Matthews.

Crypto in a flash

Bitcoin fell 4.9% in the past week and traded above $28,000 on Thursday, according to CoinDesk data. Ether fell 0.6%% in the same period to above $1,900.

Crypto companies, funds

Shares in Coinbase Global Inc.

COIN

fell 11.6% for the week to around $60.95. MicroStrategy Inc.

MSTR

lost 14.2% so far this week, to $292.84.

Crypto mining company Riot Blockchain Inc.

RIOT

Shares fell 19.5% to $10.87 as of Thursday. Shares of rival Marathon Digital Holdings Inc.

MARA

lost 17.4% to $9.51 in the last week. Ebang International Holdings Inc.

EBONY

rose 2% in the past week to around $6.02.

Overstock.com Inc. shares

OSTK

added 2.7% to $18.90 during the week.

Shares in Block Inc.

SQ

,
formerly known as Square, fell 3.6% to $62.24 for the week so far. Tesla Inc.

TSLA

shares plunged 13% to $161.63.

PayPal Holdings Inc.’s

PYPL

The stock fell 2.3% on the week to trade at around $73.76. Nvidia Corp

NVDA

rose 2.5% to $271.18 in the past week.

Advanced Micro Devices Inc.

AMD

shares fell 2.6% for the week to $89.73.

Among crypto funds, ProShares Bitcoin Strategy

BITO

lost 8.8% on the week to $16.67 on Thursday, while counterpart Short Bitcoin Strategy ETF

BITI

rose 9.3% to $21.09. Valkyrie Bitcoin Strategy ETF

BTF

fell 9% in the past week to $10.94, while the VanEck Bitcoin Strategy ETF

XBTF

fell 7.7% to $28.39.

Grayscale Bitcoin Trust

GBTC

retreated 11.6% over the past five days to $15.88 on Thursday.

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