Why You Should Be Wary Of The Bitcoin Rally With BTC At $22,000
August 02 2022 - 10:14AM
NEWSBTC
Bitcoin has been slowing down on its bullish momentum after
crossing the barrier at $22,000 and $23,000. The cryptocurrency
still holds some of its gains from last week but might be poised
for a re-test of lower levels. At the time of writing, BTC’s price
trades at $22,900 with a 2% loss in the last 24 hours and an 8%
profit over the past week. This Bitcoin Bear Market Might Not Be
Like 2020 Crypto market participants seem to be in pursuit of a
quick and persistent uptrend, like the one seen in 2020. At that
time, BTC’s price drop to a low of $3,000 and then began an ascend
to its current all-time highs. However, trading firm QCP Capital
believes the price of Bitcoin and other large cryptocurrencies
might see more sideways movement and downside pressure before
reclaiming lost territory. This price action might be more like the
2018 bear market. The firm believes BTC’s price will benefit during
Q3, 2022. During this period, the cryptocurrency might attempt to
reclaim higher levels, but with a potential to break above critical
resistance areas capped by increased selling pressure from the
Bitcoin mining sector and crypto companies suffering due to the
bearish trend. BTC’s price action might continue to operate on
uncertain grounds with “choppy moves” with an alternative narrative
between bullish and bearish with a critical resistance at $28,700
to the upside and critical support at $10,000 to the downside. The
latter matches the 85% crash that BTC’s price experienced during
the 2018 bear market. Crypto Recovery Will Be Slow But Spells
Long-Term Bullishness In 2017 when the price of Bitcoin reached its
previous all-time high at $20,000, the crypto market followed with
a massive rally. By 2018, the sector entered a multi-year bear
market with the price of major cryptocurrencies losing over 80% of
their value taking down trading liquidity with it. QCP Capital
believes the sector has entered a new age of more maturity and
resilience. The current downside selling pressure has seen high
liquidity in a robust environment with less volatility across large
cryptocurrencies. In addition, institutional interest in Bitcoin
and Ethereum has been persistent despite the downside price action.
In fact, QCP records an increase in “both trading and investments”
from these entities. In the long term, this resilience in the face
of high inflation and a hawkish Federal Reserve will translate into
a massive rally. The trading firm compared the potential growth of
the crypto ecosystem, for the decentralized finance sector, with
the Nasdaq 100. As seen below, the crypto sector has been following
the initial years of the Index and might trend lower over the
coming years before it finally reaches global adoption. Over the
next decade that suggests: (…) that the future will be a
crypto-dominated one. The same way every company in the world today
is, to some degree, an internet company. We believe in a 5-10 years
from now, every company will be, in some way, a crypto company.
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