The ongoing banking crisis has raised expectations for the Fed to further loosen liquidity. This means that the dollar depreciates. Many analysts expect 2023 to be optimistic for crypto due to the weakening of the dollar and interest rate changes. However, analysts are warning Bitcoin for bearish for now.
Bitcoin is about to witness a correction
Analyst alias DonAlt, who predicted this year’s crypto rally, warns that a correction in Bitcoin (BTC) is imminent. Check out this article of Kriptokoin.com for the analyst’s accurate predictions. DonAlt says that Bitcoin has broken out of a symmetrical triangle formation on the daily chart. Accordingly, a breakout of the triangle likely indicates that Bitcoin will enter a long correction period. “If it breaks, I think you really have a fix,” the analyst says.
Source: DonAlt/TwitterDonAlt also says that considering Bitcoin has rallied nearly 100% from its November 2022 low, the correction should give BTC bulls time to accumulate the crypto king from lower prices. In this context, the analyst makes the following statement:
I think we have some time in general. I think the markets in general will cool down. This will happen in the end, whether it’s through falling prices or flattening prices and fluctuations like we’ve been experiencing.
Bitcoin will enter the bear market in the coming months
Veteran analyst Bejamin Cowen points out that Bitcoin has similar trends in 2015, 2019 and 2020. He also warns that if there is a correction in the market, altcoins will be more severely affected than Bitcoin due to their lower liquidity. Cowen says that during the year before the halving, the liquidity in the altcoin market has dried up significantly. Therefore, he warns that investors should be careful. He suggests that a correction will cause altcoins to fall in both US dollar pairs and Bitcoin pairs.
Despite the warnings, Cowen believes that the Bitcoin season is still in full swing. The leading cryptocurrency has outperformed major altcoins in the past 60 days. According to market forecasts, the Bitcoin season is likely to start from June to July. However, Bitcoin’s current trend is nearing a 22-month high of 49%, down from 42%. This indicates that Bitcoin’s share in the overall crypto market has increased significantly since the onset of the US banking crisis.
Gold outperforms Bitcoin in recession!
Mike McGlone, senior macro strategist at Bloomberg Intelligence, predicts that Bitcoin will outperform its horse if there is an economic recession in the US. Check out this article for the analyst’s accurate predictions. According to McGlone, gold has shown an upward trend in the last two years, while Bitcoin has shown a downward trend. In this context, the analyst makes the following comment:
Trends could be in favor of gold versus recessionary Bitcoin. The momentum and the US’s tendency to go into recession could give gold an advantage over Bitcoin in 2023, especially if the stock market drops. The upward move of the yellow metal against the dips for crypto is the current trajectory on a 100-week basis.
According to McGlone, if Bitcoin gains value and stays above the key $30,000 level, the trend is likely to change. However, the analyst says that BTC is in a vulnerable position as it has a higher correlation with stocks and risk assets under pressure. In this regard, he makes the following statement:
Bitcoin staying above the $30,000 resistance will be the first indication that the tide is turning for all cryptos. However, the ceiling seems to be getting stronger as of May 2. What put BTC in a vulnerable position at the beginning of May is the high correlation between the stock market and risk assets and gold.
BTC will soon drop to $25,000
Crypto analyst nicknamed Altcoin Sherpa predicts that Bitcoin will soon drop to $25,000. The analyst also explains his rationale for this price target. According to altcoin Sherpa, the $25,000 level overlaps a lot with the 200-days EMA line, the 0.382 Fib level. Also, the level that was previously tested twice as support and resistance.
At press time, BTC is trading at $27,520.99, well above the $25,000 level. However, the price has dropped 2.67% in the previous 24 hours, according to CoinMarketCap. This negative price performance also forced BTC’s weekly price performance into the red. As a result, BTC has dropped 1.73% over the past 7 days.
Daily chart for BTC / Source: TradingView
