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The price of bitcoin (BTC) may be less than $ 13,000, technicians have warned

If crypto’s previous bubbles were to go, Bitcoin could fall even further.

It warns that the world’s top cryptocurrency is likely to make less than $ 13,000 – a 40% drop from its current level.

“We are still selling this type of cryptocurrency in this environment,” Ian Hornett, co-founder and chief investment officer of Absolute Strategy Research, told CNBC’s “Squawk Box Europe” on Tuesday.

“It’s really a liquidity game. What we’ve found is it’s not a currency or commodity and certainly not a store of value.”

Explaining his bear call, Hornet said that previous crypto rallies had seen Bitcoin fall by almost 80% from its all-time high. In 2018, for example, cryptocurrency fell close to $ 3,000 after reaching a near $ 20,000 peak at the end of 2017.

Bitcoin grossed a record high of nearly $ 69,000 at the peak of the crypto frenzy of 2021. In 2022, it will move in the opposite direction.

Nurphoto | Getty Images

According to Hornet, such a crash in 2022 “will set you back about $ 13,000,” a key support area for the token. Bitcoin climbed to a record high of nearly $ 69,000 at the height of the 2021 crypto frenzy.

“In a world where liquidity is abundant, bitcoins of this world work well,” said Hornet. “When that liquidity is removed – and that’s what central banks are doing at the moment – then you see those markets are under extreme pressure.”

The crypto world is on the verge of collapsing as investors take control of the impact of high interest rates on assets that have flourished in the era of loose monetary policy.

Last week, the Federal Reserve raised its benchmark lending rate by 75 basis points, its largest single increase since 1994. The Fed’s decision was followed by similar measures by the Bank of England and the Swiss National Bank.

That has impacted digital assets. The combined value of all cryptocurrencies has fallen by more than $ 350 billion in the past two weeks. Bitcoin traded at $ 20,010 on Tuesday, down 5% in the last 24 hours. No. 1 Crypto has lost more than half its value by date.

The crypto market was in shaky ground before the Fed’s rate hike last week, with traders thrilled by the $ 60 billion decline of the popular stablecoin TeraUSD and its sister token Luna.

To complicate matters further, the decline in the value of the derivative token, designed to be redeemed one-to-one for ether, has exacerbated financial difficulties in key industries such as Celsius and Three Arrows Capital.

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