Krypto Opens Flat In Asia But Expect Bitcoin BTC Price To Reach $25.2K Soon

Good morning. Here’s what happens:

Prices: Fairlead Strategies’ Katie Stockton expects a pullback to around $25,200 for bitcoin and a short-term pullback for Ether, but sees potential for Ether to outperform Bitcoin in the near term.

Insight: Bitcoin needs a good story before it can push higher, says Brent Xu, CEO of Web3 bond market platform Umee. What will that narrative be?

All Eyes on Ether as Bitcoin Pushes Down?

Bitcoin is now trading at $27,618, according to CoinDesk’s market data, making it effectively flat. Ether is down 0.4% at $1,838.

Katie Stockton, founder and managing partner of Fairlead Strategies, said during a recent appearance on CoinDesk TV that, in general, the crypto market likes the lower CPI numbers, but does not expect price appreciation yet.

“From a technical perspective, the market seems to like it, we’re seeing a positive reaction. But really, the action is somewhat insignificant compared to where both bitcoin and Ether have been trading up of late,” she said. “They recently broke below their 50-day moving average.”

Stockton expects Bitcoin to pull back to the base breakout point of around $25,200. However, she still sees an upward trend in the medium term.

This lower price point should serve as a good entry point for new investors, she argues.

Stockton also sees a short-term pullback for Ether as it has also moved out of its 50-day moving average. However, she predicts that Ether could surpass bitcoin in the short term.

“We expect a downside for Ether, regardless of today’s activity, with a support level around $1,755,” she said. “This may provide a natural point of stabilization as oversold conditions may provide a rebound.”

An asset market in search of a good story

Bank clerk? Inflation protection? Gold option?

Bitcoin has yet to find a new basis to drive its price from its week-long range of roughly between $25,000 and $30,000, Brent Xu, CEO and co-founder of Web3 bond market platform Umee, said on CoinDesk TV’s “All About Bitcoin” program. .

“Bitcoin is trying to find its next narrative,” Xu said.

Bitcoin’s price swing on Wednesday encapsulated its vulnerability to events in recent weeks. The largest cryptocurrency by market capitalization rose on a mildly favorable consumer price index (CPI) that showed inflation rose by a less-than-expected 4.9% in April. But BTC dipped around midday on internet rumors of a $320 million sale of US government bitcoin before rebounding as markets shrugged off the rumours.

Xu noted that the price gains linked to a mini-series of US bank failures in April and earlier this month had failed to stimulate long-term price momentum.

“We saw a bunch of banks get busted, and there’s a narrative building that bitcoin will become a new banking system,” he said. “Unfortunately, that narrative is still not fully substantiated. Bitcoin fluctuates during the existing market cycles and we haven’t reached the bullish momentum cycle yet.

He added: It will probably happen next year. For the rest of this year, we are going to see somewhat more price fluctuations.”

Xu believes the steady decline in inflation from a peak of 9.1% last June will allow the U.S. central bank to reconsider the steady diet of hawkish rate hikes that Federal Reserve critics blame for the near-bank collapse and other economic ills. “There is a likelihood that we are going to see some potential cuts,” Xu said, adding that some analysts expect rate cuts totaling 75 basis points (bps) in the months ahead.

“They need to take a long, hard look at what all these rate hikes have done, and just the possibility of a deeper recession in the near future,” he said.

Xu said liquidity would be important for crypto markets to thrive. Market makers Jane Street and Jump Crypto recently exited crypto trading in the US, and other firms focused on or at least deeply interested in crypto have also scaled back their activities or threatened to move them overseas.

But Xu said that “these markets will find a way to exist, if not within US borders,” adding that “there will be institutional liquidity coming in.”

“It’s just a matter of building the right narrative. The next narrative has to be a major innovation, like the Shanghai Shapella upgrade, or some sort of new L-2 (Layer 2), or a major improvement to the bitcoin blockchain. And when we see them, we will see more liquidity and action coming (into the markets).”

Bitcoin (BTC) edged higher after the annual US inflation rate eased to 4.9% in April from 5.0% in March, against economists’ forecasts of 5.0%, according to the Bureau of Labor Statistics. Fairlead Strategies founder and managing partner Katie Stockton shared her crypto market analysis. Asobitcoin President Will Hernandez also joined “First Mover” to provide an update on El Salvador’s bitcoin experiment. And fan-owned Sail Team LLC founder David Palmer shared his thoughts on creating a successful SailGP team with a passionate fan and owner base.