Exhausted cryptorally – Newspaper Kommersant No. 26 (7471) of 02/13/2023
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Leading cryptocurrencies have lost 5-10% in price over the past week. After strong growth in the previous month, in the absence of positive macroeconomic news, as well as against the backdrop of tighter regulation of the industry and problems with cryptocurrency sites, investors prefer to take profits. At the same time, analysts are pessimistic and believe that the current values are not the limit of the fall. They expect the market to turn around no earlier than the second half of 2023, estimating the bitcoin rate by this time at $30,000-35,000.
According to coinmarkecap.com, last week the price of bitcoin fell to $21.14 thousand, the lowest level since January 29. Even with a slight upward correction, it remains below $22,000 and 5.5% below its weekly value. The second cryptocurrency by capitalization, Ethereum (ETH), lost more than 7% in price in seven days, stopping a little above the level of $1.5 thousand. Quotes of other currencies — Binance Coin, Ripple, Cardano, Dogecoin, Solana — fell by 5–10% . In general, they are trading near the lows of the third decade of January.
Thus, other cryptocurrencies failed to hold the positions reached during the January rally for a long time (see “Kommersant” dated January 24). The market has been rising almost continuously for five weeks, so “to expect this one to continue without a break and correction” would be strange, says ENCRY Foundation co-founder Roman Nekrasov. Roman Kaufman, co-founder of BerezkaDAO and Weezi, notes that if you take data from large wallets from Dune Analytics, you can see how investors “start taking profits from the last increase, which contributes to the price drop.” At the same time, he points out that the well-known trader Andrew Kang from Mechanism Capital began to “short Ethereum with leverage by tens of millions of dollars”, and trader Michael Bury, who has 1.3 million subscribers, regularly writes posts about the sale of assets, thereby “accelerating FUD (Fear, uncertainty and doubt, or “Fear, uncertainty and doubt.”— “b”) among beginners in crypto.”
According to experts, there are no positive signals for the continued growth of the cryptocurrency market.
Meanwhile, there are negative signals that are putting pressure on the crypto market, including a clear tightening of supervision over p2p cryptocurrency exchange sites, the closure of LocalBitcoins, possible problems with Binance, and so on, said Roman Nekrasov. In addition, the payment service PayPal has abandoned the idea of launching its own stablecoin, which speaks to the “unpredictable regulatory landscape” in the industry, he points out.
Meanwhile, none of the problems of 2022 in the global economy has yet been resolved, analysts emphasize. Inflation is still many times higher than the target values, large companies are massively reducing staff (which so far does not strangely affect unemployment, but this is a delayed bomb), debts on loans and mortgages are growing, global political instability has not gone away, the head of InDeFi Smart Bank lists Sergei Mendeleev. “It is enough to look at the graphs of the growth of public debt and the money supply, which are increasingly reminiscent of an exhibitor, so that any sane person understands that this cannot continue. Either a long, hard and ruinous correction of the stock market (and the cryptocurrency tied to it), or the actual collapse of the dollar system with double-digit stagflation in both unemployment and the price index, ”Mr. Mendeleev predicts.
At the same time, the bitcoin rate may not be able to stay at current levels for a long time, market participants believe.
According to Mr. Nekrasov, we can expect several more surges to $25-27 thousand, but then the rate of the leading cryptocurrency will fall below $20 thousand. More positive changes are possible only in the second half of the year. “Growth can be in the fall, somewhere in October, six months before the halving (decrease in the reward for cryptocurrency mining.— “b”). At first it will be moderate, then it will begin to pick up pace. I expect to see the end of the year somewhere around $35,000,” the expert summed up. According to Roman Kaufman, the bitcoin rate by this time may consolidate above $30,000, and ETH – above $3,000.
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