Are Crypto Investors in for a Bumpy Ride this Fall? 

September 15, 2022

Bitcoin and other cryptocurrencies had a rough day on Monday, as erratic trading drove digital assets in different directions due to a confluence of events.

Bitcoin’s price has risen 2% in the last 24 hours to $22,200, after swinging many times in a range of roughly $1,000. On Friday, the largest digital asset staged an astonishing rebound, rising from roughly $19,000 to return to the $20,000 to $25,000 level where it has been since a mid-June selloff pushed it down from $30,000.

“Our short-term indicators have improved, supporting a greater oversold bounce,” said Katie Stockton, managing partner at Fairlead Strategies. She cautioned against investors taking counter-trend positions in Bitcoin and other major cryptocurrencies. However, she also stated that they would not be shocked to see the “upper boundary of cloud-based resistance near $23,000 tested before the downtrend regains hold.”

Bitcoin has risen in value with equities. The Dow Jones Industrial Average and the S&P 500 were on course for a fourth consecutive day of gains, ending a three-week losing trend following a surge before the weekend. While cryptos should theoretically move independently of conventional finance, they are highly connected with other risky assets such as equities.

The Economy Has an Impact on Riskier Assets Like Crypto

When economic uncertainty is high, investors lose faith in riskier assets such as cryptocurrency and tech stocks.

According to Bitcoin Method, senior market analyst at brokerage firm Oanda, “the retail trader is starting to fear again as meme stocks and cryptos are under pressure.” Moya sees a continuing link between bitcoin and tech equities, which “may signal doom for bitcoin.”

The stock market continues to underperform as corporations in the United States continue to decrease manpower through layoffs. According to Moya, the implications for bitcoin, Ethereum, and the crypto market are obvious.

If the sentiment on Wall Street continues that it will be a horrible September fall, a retest of the summer lows is imminent,” he added.

Wendy O, a cryptocurrency specialist, and market analyst, believes bitcoin will rise beyond $26,700 before she becomes positive in the short term. Bitcoin hasn’t been this cheap since June.

“Will we be able to do that?” “I don’t know yet,” O adds, “but one thing I’m observing with bitcoin is that we touched $24,800 [on July 30] and had a number of efforts to sustain and flip beyond that, but we were unable to do so.” “We may have a brief retest before continuing to rise.”

Should You Invest in Bitcoin Right Now?

Bitcoin, Ethereum, and cryptocurrency prices have fallen in tandem with the stock market recently as investors cope with growing inflation, Russia’s assault on Ukraine, rising interest rates, and recession worries.

Bitcoin fell below $19,000 on Thursday, down over 70% from its all-time high of $69,000 in November 2021. Meanwhile, Ethereum went below $1,000 for the second time in June on Thursday, as the network prepares for a large and long-planned update.

The June crypto market fall occurred after the latest inflation data revealed rising consumer prices. The Federal Reserve raised its benchmark interest rate by 75 basis points, the highest rise over three decades. The crypto market lost about $2 trillion, and the S&P 500 entered a bear market.

Nonetheless, some experts believe bitcoin and Ethereum values might fall considerably further. According to Kavita Gupta, venture capitalist and founder of Delta Blockchain Fund, this might be the start of a “crypto winter,” a time in which values fall and remain low as they did between early 2018 and mid-2020. According to Gupta’s technical market research, bitcoin might fall below $14,000, and Ethereum could plummet to $500 in the coming weeks or months.

By: Hanna Parker


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