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Expect more chop, downside, then sideways price action for BTC this summer, says bitcoin trader

Debate over the state of the crypto market has been a major headline for the past few weeks, as local media in non-crypto talk about Bitcoin (BTC) and DeFi investors investing in assets with no fundamental value. At the same time, crypto-savvy analysts and traders are pouring over the charts, looking for clues that indicate when the market will bottom and reverse course.

Novice investors are clearly nervous and some have predicted the demise of the burgeoning asset class, but for those with many cycles, this new bear market is another forest clearing fire that will eventually lead to a healthier ecosystem.

The next steps for the crypto market are a topic discussed in depth with Cointelegraph contributor Crypto Jeb and independent market analyst Scott Melker. The pair chatted about their views on why Bitcoin’s value proposition remains strong and what the top cryptocurrency’s price action might look like moving forward.

Here’s a look at some of the key points discussed by Crypto Jeb and Melker.

Bitcoin is being used as originally intended

Traders are primarily focused on bitcoin’s spot price and lament that it is not acting as an inflation hedge, but Melker pointed out that its performance largely depends on a person’s country of residence and economic status.

Bitcoin may depreciate significantly in terms of US dollars, but compared to countries like Venezuela, which is experiencing hyperinflation, or Nigeria, which has a large unbanked population, BTC has given people a way to preserve the value of their money and transact. Open financial system.

One of the big things Melker highlighted was that Bitcoin was the first real asset that gave people around the world the ability to opt out of the current financial system if it didn’t work.

According to Crypto Jeb, Bitcoin is thermodynamically good, which he defines as the property of holding energy put into a system and not “leaking” it through things like inflation.

What direction will the market take?

As for the future of the market, Melker emphasized that while crypto adoption may not appear to be moving as fast as those who have been in the market for years, “Bitcoin adoption is faster than the Internet. It’s a hockey stick curve that’s going completely parabolic.”

Both Crypto Jeb and Melker suggested that a paradigm shift in investing in cryptocurrencies will take more time because 401k or Roth IRA and more investors are trained to fear risk.

In response to potential critics who cite bitcoin’s volatility as a key reason to avoid cryptocurrencies, Melker highlighted the struggles equity markets have had recently, citing the poor performance of Netflix, Facebook, PayPal and Kathy Woods’ ARK funds.

Melkar said,

“Last month I saw research from Messari that I believe was the first time that said there’s not a single place where you can basically put money in an asset class and accumulate any kind of value. And if you’re staying in cash, you’ve lost 8% of your purchasing power by doing that.

Related: Deutsche Bank analysts see Bitcoin recovering to $28K by December

Expect more trouble in the short term

According to Melker, it is important to remember that the current state of the market is poor and that in the short term, “the trend is your friend” and further trouble is likely.

That said, Melker pointed out that some developments are coming that could help the market move out of its hiatus, including the Fed tightening cycle, which has historically put pressure on asset prices in the first three quarters of a tightening cycle until the market adjusts. A new reality.

Melkar said,

“My best guess is that we’re going to have a very volatile, boring low-volume, low-liquidity summer. Maybe we’ll put new lows, or maybe we’ll cut around $17.5K to $22K or $23K. And then we’ll really see what the market is made of by the end of the year. Let’s start to see that.

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The views and opinions expressed herein do not reflect the views of the authors and Cointelegraph.com. As every investment and trading move involves risk, you should conduct your own research when making a decision.