prediction

Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s

Research from Bloomberg Intelligence argues that liquidity conditions still do not favor a continuation of the Bitcoin rally.

Bitcoin (BTC) and crypto may yet see a long-term correction thanks to central banks keeping liquidity tight, Bloomberg warned.

In its latest research, Bloomberg Intelligence revealed a cool stance on the ongoing 2023 crypto market rally.

Bloomberg: Expecting BTC price to hold “may be illogical”

Despite gaining 70% in Q1, Bitcoin is not convincing everyone that it will continue to climb or even maintain current levels near $30,000.

Examining the macroeconomic climate, Bloomberg Intelligence became the latest voice to note the close relationship between crypto performance and global central bank liquidity levels.

As inflation bites, banks have been withdrawing liquidity from the economy, with risk assets declining as a result — including crypto. The United States Federal Reserve’s quantitative tightening (QT), which began in late 2021, coincided with the current all-time high for Bitcoin.

Despite the recent banking crisis, Bloomberg noted that plunging M2 money supply and bank deposits mean that liquidity continues to be squeezed.

“Risk assets typically rise and fall on the back of liquidity and plunging US money supply, and bank deposits indicate headwinds for cryptos,” it stated in an analysis uploaded to Twitter by Bloomberg Intelligence senior macro strategist Mike McGlone.

“It may be illogical to expect that stock market, crude oil, copper and the Bloomberg Galaxy Crypto Index (BGCI) to sustain recent bounces with year-over-year measures of money supply and commercial bank deposits falling around 2% — the most in our database since 1959.”

The misgivings come as Bitcoin faces a battle to flip historical resistance back to support, with bulls as yet unable to effect major change.

When it comes to liquidity, meanwhile, others have already noted that crypto now responds to the actions of central banks other than the Fed, and both China and Japan have enacted liquidity injections this year.

“A top question at the start of April is what stops the contracting liquidity?” Bloomberg, meanwhile, continued.

“Most central banks still tightening may portend a lower plateau for the BGCI. Our take is Bitcoin faces headwinds but will eventually transition to trade more like gold and Treasury bonds.”

U.S. dollars gives Bitcoin heat

BTC/USD traded around $28,100 at the time of writing on April 6, according to data from Cointelegraph Markets Pro and TradingView.

Related: Latest Bitcoin price data suggests double top above $200K in 2025

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

In a potential short-term tailwind for risk assets, the U.S. Dollar Index (DXY) saw fresh losses, abandoning a modest comeback to drop back below 102.

Analyzing the situation, popular Crypto Twitter account Cold Blooded Shiller remained tentatively optimistic about the outcome of BTC’s price.

Analyst Justin Bennett nonetheless flagged a distinct range still intact for the DXY, predicting a rebound to come.

“All the ‘dollar is dead’ chants are about to be silenced by what is still the global reserve,” he warned.

U.S. dollar index (DXY) annotated chart. Source: Justin Bennett/Twitter

Related: Crypto winter can take a toll on hodlers’ mental health

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin price dives pre-FOMC amid warning $17.6K low was not the bottom

The bottom “is not in” for either stocks or crypto, one analyst believes, as alarming data shows copycat moves from 2008 by the S&P 500.

Bitcoin (BTC) dropped to weekly lows at the Aug. 17 Wall Street open as upcoming Federal Reserve comments unsettled risk assets.

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

Dollar climbs as Fed minutes due

Data from Cointelegraph Markets Pro and TradingView tracked a more than 2% daily decline in BTC/USD, which hit $23,325 on Bitstamp.

Already showing signs of weakness, the pair slid further as United States equities began trading, hours before the Federal Open Markets Committee (FOMC) was due to release minutes from its latest meeting.

While not involving a decision on interest rates, the meeting was cued to give an insight into the Fed’s thinking in terms of the next rate tweak due in September.

“The important event tonight with the FOMC minutes, through which information can be received whether the FED is going to be hawkish or dovish,” Cointelegraph contributor Michaël van de Poppe summarized in his latest Twitter update.

“I don’t think it will have a massive impact, however, crypto tends to give it a ton of value and, therefore, lots of volatility.”

Stocks had hit major resistance in line with crypto during the week, leading some concerned sources to continue to predict a further major retracement across the board.

Justin Bennett, the founder of crypto education platform Crypto Academy, warned that the S&P 500 was copying behavior from immediately prior to the 2008 Global Financial Crisis.

“This is mind-blowing. The S&P 500 is mimicking the 2008 crash. Even the timing since the ATH is nearly identical,” he commented on a comparative chart.

“The bottom is NOT in for stocks or crypto.”

A telltale sign on the day came in the form of an advancing U.S. dollar, with the U.S. dollar index (DXY) seeking to attack resistance in place throughout August.

“$DXY could be on its way to 112-113 after the fakeout below 105.50. That’s going to weigh on stocks and crypto,” Bennett added.

U.S. dollar index (DXY) 1-day candle chart. Source: TradingView

Buyers eye lower bids

On shorter timeframes, the trend on Bitcoin was also rapidly losing steam as bid support inched down the Binance order book.

Related: Bitcoin price sees firm rejection at $24.5K as traders doubt strength

On-chain monitoring resource Material Indicators captured the action, concluding that “even if we get another pump, still believe the Bear Market Rally is losing momentum.”

An upside target could come in the form of the 100-day moving average, a separate post explained, lying at $24,544 at the time of writing.

“Been warning about this breakdown for Bitcoin the past few days,” commentator Matthew Hyland concluded.

“Structure has shifted overall weak recently. Market seemed to have its first signs of life just last week. That seems to be short lived.”

BTC/USD buy and sell levels (Binance). Source: Material Indicators/ Twitter

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin to make new all-time-highs within 24 months: Coinshares CSO

Demirors however said she certainly expects “more pain ahead” for tech stocks and crypto as we head closer to recession.

Bitcoin (BTC) may have further to fall, but CoinShares chief strategy officer Meltem Demirors believes the top cryptocurrency will reach new all-time highs within the next 24 months.

Speaking on CNBC’s Squawk Box on Monday, Demirors noted that Bitcoin has always been a “cyclical asset” with drawdowns from peak to trough at 80 to 90% historically.

With Bitcoin currently sitting at about 65% down from its all-time highs in November 2021, Demirors believes “there is still room for some downward correction.”

However, Demirors noted there has been strong support around $20,000 and that she did not expect Bitcoin to fall below $14,000. She predicted the pain would be a distant memory by 2024, saying:

“In the next 24 months, we will see new all-time highs in Bitcoin.”

Bitcoin is currently priced at $19,401, down 2% in 24 hours and down 72% from its all-time high.

A reversal may be some time off, however, given Demirors can see “no near upside catalysts” — which could signal more pain in store for weaker crypto projects.

“We obviously had a lot of liquidations, a lot of insolvencies that had a massive impact on the market. […] We’re talking about $10, $20, $30 billion of capital that has basically evaporated overnight:”

“[We] certainly expect more pain ahead for tech stocks, growth, and also crypto.”

Demiror said she expected a large number of crypto assets to be wiped out during the bear market, similar to what has been seen in tech stocks.

“There’s a very long, long tail of crypto assets that I think will go to zero, that doesn’t really have any long-term prospect as we’ve seen with so many tech stocks as well.”

Louis Schoeman, managing director at broker comparison site Forex Suggest, has a similar view. In a recent 9News report, he predicted that the current crypto downturn could kill off as much as 90 percent of all crypto projects.

“This is a cleansing process,” Schoeman said, adding that only the strongest crypto projects will survive this bear market.

“But it also serves as a massive opportunity for many no-coiners to enter the crypto market for the first time. Fortune favors the brave in crypto right now.”

Related: Despite ‘worst bear market ever,’ Bitcoin has become more resilient, Glassnode analyst says

Last month, billionaire entrepreneur Mark Cuban said he doesn’t expect the crypto bear market to be over until there’s a better focus on applications with business-focused utility.

Cuban also believes mergers between different protocols and blockchains will eventually see the crypto industry consolidate, as “that’s what happens in every industry.”

Key Bitcoin chart ‘will confirm bottom is in’ by July 15, says trader

It’s all about two moving averages crossing over as proof that BTC price action is done with the dip.

Bitcoin (BTC) is due to give a definitive signal that a macro bottom is in this month, one analyst has concluded.

In a Twitter thread on July 6, popular commentator Wolf eyed key moving average data as proof that BTC price action will not be going lower.

Key chart crossover eyed as end to bear market losses

Amid repeated calls for BTC/USD to revisit levels not seen since Q4 2020, one simple historical trend is now saying that the pair has already seen its latest macro lows.

Analyzing the 3-day chart, Wolf argued that the 100-day moving average (MA) crossing the 200MA will act as a price floor signal — just like in previous bear markets.

“Negative 3d MA100 will cross positive 3d MA200 by half July, that would confirm that bottom is in,” he wrote.

Specifically, the crossover of the two MAs is due on or by July 15 — in just a week’s time — after which future trajectory should be confirmed. Should Bitcoin avoid major downside in the meantime, $17,600 will thus remain as the latest long-term BTC price bottom.

Despite historical precedent, such an outcome is nonetheless far from certain. Prior to the July 15 deadline, crypto markets will have to weather an ongoing macro economic storm, which has so far proved deadly for risk assets across the board.

July 13 will be of particular interest to market participants, this date marking the release of Consumer Price Index (CPI) data from the United States for the month of June.

As Cointelegraph recently reported, inflation is already at 40-year highs, and CPI readouts have shown a consistent uptrend throughout 2022.

The faster inflation is shown to be accelerating, the more likely a reaction from the Federal Reserve, with monetary tightening having a direct negative impact on risk asset performance.

Moving averages stack up as resistance

BTC/USD meanwhile circled $20,500 at the time of writing on July 7, approaching wapproaching weekly highs.

Related: World’s first short Bitcoin ETF sees exposure explode 300% in days

In a thread of his own on July 6, analyst Keith Alan flagged various other daily, weekly and monthly MAs as zones of interest should Bitcoin manage to sustain upwards momentum.

“Continued rejections at the 21 DMA would indicate there isn’t enough bullish sentiment to push higher, which brings downside targets into focus,” he explained.

He noted, however, that should a resistance/support flip (R/S) occur, the 50-month MA would come into play, followed by the essential 200-week MA which has formed a key focus in prior bear markets.

As of July 7, the 21-day MA, 50-month MA and 200-week MA stood at $20,300, $21,570 and $22,560 respectively, data from Cointelegraph Markets Pro and TradingView showed.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin bounces to $30.7K as analyst presents Stock-to-Flow BTC price model rehash

United States stock markets provide the backdrop for reversal in Bitcoin as $30,000 manages to hold.

Bitcoin (BTC) climbed to fresh local highs overnight into June 3 after United States equities cut losses.

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

Wall Street provides short-term relief

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining steadily to hit $30,670 on Bitstamp before consolidating.

The mood among stocks was more solid during the June 2 session, with the S&P 500 reclaiming the majority of its lost ground over the past month. The Nasdaq Composite Index ended up 2.7%.

Analyzing the crypto market cap compared to the Nasdaq, popular analyst TechDev noted what could be an incoming inflection point.

Fellow trader and analyst Pentoshi, meanwhile, issued a sobering outlook for the S&P 500 on weekly timeframes going forward.

Bitcoin, itself continued to face calls for a retracement, which would eclipse May’s $23,800 lows.

Crypto Tony still targeted between $22,000 and $24,000, demanding a break of a trendline currently near $32,500 to consider long scalping.

“Bitcoin held the $30K level, so long would still be intact from the $29.3K region,” Cointelegraph contributor Michaël van de Poppe added on his short-term strategy.

“Now flipping $30.3K would be continuation towards $31.8K possible.”

At the time of writing, BTC/USD lay at around $30,500.

Timmer: Bitcoin supply and demand needs “fresh take”

Zooming out, one on-chain analyst became the latest to take on the increasingly controversial Stock-to-Flow (S2F) BTC price model.

Related: This classic Bitcoin metric is flashing buy for first time since March 2020

Having failed to validate its $100,000 end-of-year prediction in 2021, Stock-to-Flow has become increasingly sidelined as its creator, PlanB, fields criticism.

While acknowledging the model’s potential shortcomings, Jurrien Timmer, head of global macro at on-chain analytics firm Glassnode, revisited it, offering a tweak that he argued would serve to increase its utility.

“It’s time for a fresh take on Bitcoin’s supply/demand dynamics,” a dedicated Twitter thread began.

Timmer proposed taking into account Bitcoin’s supply curve to produce a more conservative trajectory for price growth. The result, he considered, had retroactively already captured BTC price action more accurately than the raw S2F predictions.

“If accurate, It suggests still robust but less pie-in-the-sky upside than before. Maybe even several years of sideways, in line with the halving cycle, and likely continued volatility,” he continued.

PlanB had noted that the May monthly close had been Bitcoin’s lowest since December 2020.

As Cointelegraph reported, the next block subsidy halving event is increasingly figuring as a line in the sand for a return to bullish strength.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.