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Bitcoin dips below $42K as crypto sentiment returns to ‘fear’

Bitcoin dips below $42K as crypto sentiment returns to ‘fear’

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Bitcoin (BTC) trended toward a $40,000 retest on Feb. 12 as BTC price action bore out analysts’ predictions.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

TradingView showed BTC/USD reaching local lows of $41,741 on Bitstamp Saturday before a rebound over $42,000.

An about-turn had ended the pair’s advance after U.S. CPI data hit, and calls soon emerged for a return to $40,000 or even lower to see how steely bulls’ resolve really was.

“Bitcoin looking at the same resistance still,” he summarized alongside a chart showing potential support and resistance targets.

“Weekly order block rejecting in a harsh manner. Weekly candle starts to look ugly + several levels of fear across the market for coming weeks. Remaining flat at this stage.”

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BTC/USD 1-week annotated chart. Source: Michaël van de Poppe/ Twitter

Others meanwhile called time on the potential scope of Bitcoin’s longer-term downside.

“For those waiting for sub 30k $BTC, may the crypto gods be with you because the odds are not,” popular Twitter commentator Credible Crypto advised.

For those waiting for sub 30k $BTC, may the crypto gods be with you because the odds are not. https://t.co/LJPDoa4KCx

— Credible Crypto (@CredibleCrypto) February 12, 2022
Even at current levels, Bitcoin’s weekly close was set to be practically identical to the last, thus preserving the majority of the prior gains that had taken it out of the $30,000 zone.

The late drawdown this week was nonetheless more than convincing enough for crypto market sentiment to take a fresh hit.

According to the Crypto Fear & Greed Index, three days of “neutral” territory was enough before the return of “fear” as the main force at play among traders.

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On Saturday, the Index measured 44/100, having reached 54/100 Wednesday.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

Discussing January’s weeks-long trip into the bottom “extreme fear” zone, trading suite Decentrader argued that a sentiment reset had likely already come based on historical patterns.

“Such extended periods of extreme fear give an indication that general market participants can be caught offside. We saw that play out with the fast move to the upside that $BTC has shown over the past two weeks,” analysts wrote in a market update released Friday.

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What Bitcoin Needs To Regain Its Higher Marks, Analyst Explains

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What Bitcoin Needs To Regain Its Higher Marks, Analyst Explains

The crypto market crash started from the Feds and its fight against inflation. The announcement to increase interest rates caused a panic that created doubts in the minds of crypto investors. As the Federal Reserve implemented the plan, the overall financial markets, including crypto, plunged. 

Another factor that helped push crypto prices down was the crash of Terra Luna USDT. The algorithmic stablecoin depegged, leading to massive losses that plunged the market into oblivion. Since then, crypto prices have fluctuated in a terribly prolonged crypto winter. 

Related Reading: Serum (SRM) Price Looks Set After Hibernation, Can Price Go To $1?

Cryptos such as Bitcoin and Ethereum lost their massive gains, and many crypto projects disappeared completely. 

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But the Summer Hasn’t Been Good Either 

Some analysts opined a price rally as the market lamented over the continuing crypto winter. But unfortunately, these predictions seem to be delayed as the crypto market records more fluctuations. 

For instance, Bitcoin has lost more than 37% since the market downtrend. June 2022 brought a lot of price crashes for the coin like never recorded before. The next month, July saw a little gain of 17% in BTC price, but that rally was short-lived. The coin lost everything and is now trading below the $20 mark. 

Bitcoin even dived deeper on September 7 when the price plummeted below $19K; it recovered quickly. So what’s the way forward for the number one crypto?

Bitcoin’s price is currently trading above $19,000. | Source: BTCUSD price chart from TradingView.com

Analyst Indicates A Solution To BTC Recovery 

While the investors await a price rally for Bitcoin and others, an analyst has indicated that such occurrence depends on the Federal Reserve. 

Dan Nathan, the RiskReversal Advisors principal stated this during the popular CNBC’s “Fast Money” episode. According to Nathan, Bitcoin can only reverse to a bullish trend if the Feds change their stance on the inflation fight approach. 

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Recall that in the last Federal Reserve annual meeting held on August 26, 2022, Jerome H Powell made a speech that caused concerns for investors. The feds’ chair declared a more aggressive approach in the agency’s fight against inflation. 

Before the meeting, Neel Kashkari suggested using the Vokcker approach. Given that Kashkari was initially dovish in his stance, the crypto community became worried. Powell intensified the panic when he announced that the agency would intensify its strategies. So, the likelihood of the feds pivoting in its approach is farfetched.

To say that these outplay affected crypto prices is an understatement. Many coins started a downward trend from that day and are still at it until now. The short-lived rallies are no match for the frequent pullbacks. 

Related Reading: On-Chain Data Shows Bitcoin Whale Dumping Behind Dip Below $19k

Bitcoin dominance has plummeted to its lowest ever. Nathan even stated that the coin is trading like an ordinary stock currently. So, a rally for the number one crypto may not be possible this 2022, given that the feds are not about to pivot.

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Featured image from Pixabay and chart from TradingView.com

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Grayscale: Bitcoin Could See Another 5-6 Months Of Downward Or Sideways Price Movement

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Grayscale: Bitcoin Could See Another 5-6 Months Of Downward Or Sideways Price Movement

Grayscale Investments has explained that there may be another 250 days of the current bearish crypto market, citing patterns in previous cycles. In addition, “Bitcoin is 222 days off the all-time high, which means we may see another 5-6 months of downward or sideways price movement,” the world’s largest digital asset manager detailed.

Grayscale’s Crypto Market Outlook

Grayscale Investments, the world’s largest digital asset manager, published a report titled “Bear Markets in Perspective” this week.

The firm explained: “The length, time to peak and trough, and recovery time to previous all-time highs in each market cycle may suggest that the current market may resemble previous cycles, which have resulted in the crypto industry continuing to innovate and push new highs.”

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The report details:

Crypto market cycles, on average, last ~4 years or approximately 1,275 days.

While most bitcoiners are familiar with market cycles based on bitcoin’s halving cycle, Grayscale has defined an overall crypto market cycle that also roughly works out to a four-year period.

The digital asset manager explained: “While methods vary for identifying crypto market cycles, we can quantitatively define a cycle by when the realized price moves below the market price (the current trading price of an asset), using bitcoin prices as a proxy.”

Chart showing bitcoin market cycles. Source: Grayscale Investments

“As of June 13, 2022, the realized price of bitcoin crossed below the market price signaling that we may officially have entered a bear market,” Grayscale described.

The report proceeds to explain that in the 2012 cycle, there were 303 days in the zone where the realized price was less than bitcoin’s market price. In the 2016 cycle, there were 268 days in the zone.

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Noting that in the 2020 cycle, we are only 21 days into this zone, the digital asset manager noted:

We may see another ~250 days of high-value buying opportunities when compared to previous cycles.

In addition, the report notes that crypto market cycles have been taking about 180 days longer to peak each time.

Crypto cycles. Source: Grayscale Investments

“From peak-to-trough, the 2012 and 2016 cycles lasted approximately 4 years, or 1,290 and 1,257 days respectively, and took 391 days to fall 73% in 2012, and 364 days to fall 84% in 2016,” Grayscale said.

“In the current 2020 cycle, we are 1,198 days in as of July 12, 2022, which could represent another approximate four months left in this cycle until the realized price crosses back above the market price,” the firm continued, elaborating:

Bitcoin is 222 days off the all-time high, which means we may see another 5-6 months of downward or sideways price movement.

What do you think about Grayscale’s explanation of where the crypto market is headed? Let us know in the comments section below.

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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80% down

Finder’s Bitcoin Prediction Report Expects BTC To Bottom At $13,676 And End The Year At $25,473

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Finder’s Bitcoin Prediction Report Expects BTC To Bottom At $13,676 And End The Year At $25,473

According to the latest crypto prediction report published by the product comparison platform finder.com, 77% of 53 fintech specialists polled in the report say cryptocurrency markets are officially in a “crypto winter.” The poll further explains that only 29% of the report’s participants believe the bear market will end in 2022. While bitcoin is expected to surpass $100K per coin by 2025, Finder’s experts think bitcoin will bottom out at $13,676 per unit, but also end 2022 at $25,473 per unit.

Finder’s 53 Fintech Specialists Attempt to Guess Bitcoin’s Future Value

Finder.com published a new forecast that says bitcoin (BTC) will drop to $13,676 per unit this year, according to 53 surveyed fintech specialists. While the report notes that the experts think the bottom will be around $13,676 per BTC, they also expect the leading crypto asset to end the year at $25,473 per coin.

The panelists’ prediction is very much aligned with the 80% drop theory as BTC has lost more than 80% from the all-time price high during every major bear market. At the time of writing, BTC is down over 72% lower than the $69K all-time high (ATH) recorded on November 10, 2021.

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Bitcoin (BTC) monthly chart on July 13, 2022.

In mid-June, Bitcoin.com News reported on what prices would look like if BTC and ETH followed the same bear market patterns as they did in previous years. The math shows that an 80% drawdown from BTC’s ATH in November 2021, would be roughly $13,800 per unit.

Finder’s prediction report indicates BTC’s expected 2022 bottom value is a touch more than 80% lower than the ATH. However, Martin Froehler, the CEO of Morpher, has a different outlook, and he expects a much lower bottom price. Froehler told Finder’s researchers that BTC will likely drop to $12K per unit, before jumping back to $40K by the year’s end.

“It’s reasonable to expect to see more big projects fail in the next couple of months,” Froehler explains in the Finder’s prediction report. “Retail sentiment is at historic lows due to global economic uncertainty and inflation. Highly leveraged miners, who just had to digest the China exodus, will capitulate and increase the downside pressure even more. We will see even lower Bitcoin prices.”

46% of Finder’s Experts Expect the Bear Market to Continue Into 2023

Finder’s study further says that while only 29% of the panelists believe the crypto bear market will end this year, 46% think that the crypto winder will continue until 2023 and 24% believe it could last until 2024. Paul Levy, a senior lecturer at the University of Brighton, said he estimates the bear market will continue until 2023 and bitcoin will close the year at $15K per unit before bouncing back.

“Bitcoin will likely bounce back in 2023 which may actually lead to inflated expectations and further instability. Much of course depends on world events such as the war in Ukraine and its own ongoing impact on global confidence,” the University of Brighton senior lecturer noted.

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The product comparison platform, finder.com, has published numerous crypto price prediction reports and the forecasts are merely guesses and conjecture. For instance, Finder’s researchers conducted a poll on Terra’s LUNA just before the crypto asset’s demise, and a great portion of Finder’s experts had high hopes for the digital asset’s future value.

According to the LUNA poll, Finder’s experts predicted LUNA (now luna classic) would be $143 before the end of the year. With luna classic (LUNC) trading for $0.00009522 per unit, the chances of it reaching $143 is arguably an impossible feat.

In the latest bitcoin prediction report, Vetle Lunde, an Arcane Research analyst, said that bitcoin will bottom out at $13K per unit and end 2022 at $20K. “A myriad of negative forces has crushed the strength of bitcoin… Further tightening and unwinding of bad crypto debts will create sobering times onwards, and investors should buckle up for more difficulty,” Lunde explained.

Last April, Finder’s BTC prediction report had shown panelists expected bitcoin to reach $179,280 by 2025 and $420,240 by 2030. Today, however, those predictions are much lower, as the fintech specialists from the latest report estimate BTC to be worth $106,757 by 2025 and $314,314 by 2030.

What do you think about the latest finder.com poll that attempts to predict bitcoin’s future value? Let us know your thoughts about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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