Bitcoin falls below $ 20,000 as the dollar rises
Bitcoin fell back below $ 20,000 on Tuesday after having its strongest week in more than three months last week, when a rise in the dollar rippled through global markets.
The largest cryptocurrency fell as much as 2.6 percent to $ 19,870, falling for the fourth day in a row ahead of US consumer price data on Tuesday. It reached $ 22,472 on Friday as risk appetite returned to broader assets. The second largest Ether fell as much as 4.1 percent to $ 1,090.94. The MVIS CryptoCompare Digital Assets 100 Index fell as much as 2.6 percent.
“Expect apathetic back-end volumes and base flows in another summer trading week with CPI likely to be the main event on July 13,” Genesis’ Noelle Acheson and Gordon Grant said in a note Monday.
“Despite a small fireworks display around last Friday’s weekly options that saw Bitcoin blow through $ 22,000 and touch the 200-week moving average, with Ether pushing for $ 1,300 in sympathy, the weekend session saw a resumption of choppy, downward-looking price action that has marked in recent months. “
The dollar jumped on Monday ahead of the CPI, which could provide insight into the Federal Reserve’s potential path to rising interest rates. Bitcoin and other cryptocurrencies have struggled while the central bank works to combat high inflation, and have tended to trade with risk assets over the past few years.
Wall Street expects the cryptocurrency crash to be much worse.
The token is more likely to fall to $ 10,000, and roughly halve its value, than it is to accumulate back to $ 30,000, according to 60 percent of the 950 investors who responded to the latest MLIV Pulse survey. Forty percent saw it go the other way.
The skewed prediction underscores how bearish investors have become. The crypto industry has been shaken by troubled lenders, collapsed currencies and an end to the simple monetary policy of the pandemic that led to a speculative frenzy in the financial markets.
About $ 2 trillion has disappeared from the market value of cryptocurrencies since the end of last year, according to data collected by CoinGecko.
Retail investors were more concerned about cryptocurrencies than their institutional counterparts, with almost a quarter declaring asset class to be rubbish. Professional investors were more open to digital assets.
But overall, this sector remains polarizing: while around 28 percent of total respondents expressed strong confidence that cryptocurrencies are the future of finance, 20 percent said they are worthless.
Bitcoin has already lost more than two-thirds of its value since reaching almost $ 69,000 in November and has not traded as low as $ 10,000 since September 2020.
“It’s very easy to be scared right now, not just in crypto, but in the world in general,” said Jared Madfes, a partner at Tribe Capital, a venture capital firm. He said that expectations of a further fall in Bitcoin reflect “people’s inherent fears in the market”.
Cryptocracy is likely to put further pressure on governments to step up regulation in the industry. Such supervision is seen as positive by the majority of respondents, as it can improve trust and lead to wider acceptance among institutional and private investors.
Government intervention is also likely to be welcomed by consumers who are burned by the collapse of so-called stackecoin TerraUSD and troubled intermediaries such as Celsius Network and broker Voyager Digital.
Central banks are also considering developing their own digital currencies for use in digital payments.
But neither the recent price falls – nor the potential challenge from central banks – are expected to boost the industry significantly by abolishing the two dominant tokens, Bitcoin and Ether. A majority of respondents expect that one of these two will remain a driving force in five years, although a significant proportion see that the central bank’s digital currencies play a key role.
“Bitcoin still drives large parts of the crypto market, while Ethereum is losing its lead,” said Ed Moya, senior market analyst at Oanda Corp., a currency broker.
There was a broader consensus on one corner of the market: non-fungible tokens. NFTs became known for attracting millions of dollars in valuations for images of monkeys during the peak of the crypto boom. However, the vast majority of respondents consider them only art projects or status symbols, with only 9 percent seeing them as an investment opportunity.
Also, those looking for the next asset price bubble may want to look elsewhere, as speculative ways rarely hit the same asset class twice. Ultimately, the next big run-up of most respondents is expected to be completely unrelated to cryptocurrencies, with NFTs, the next generation of internet known as web3 and other blockchain developments being seen as having low chances of launching the next madness.
“The next financial bubble is always a little different than the last bubble, so the majority is absolutely right in this,” said Matt Maley, marketing strategist at Miller Tobacco + Co.
Updated: July 12, 2022, 03:39
