Financial analyst of the crypto exchange Currency.com Mikhail Karkhalev, in an author’s column on RBC-Crypto, spoke about the prospects of bitcoin for the coming months and the likely start of a new altcoin season
On the evening of October 6, the bitcoin exchange rate on the crypto exchange Currency.com updated the maximum since mid-May at around $55.7 thousand. The cryptocurrency has sharply risen in price by almost 10%, but could not stay above $ 55 thousand. As of October 7, 19:55 Moscow time, bitcoin is trading at $54.1 thousand.
Financial analyst of the crypto exchange Currency.com Mikhail Karkhalev
Three main factors known at the moment led to the increase in the value of bitcoin:
The general market mood and the situation in the global economy. At first glance, it may seem that these are different things, but it is the difficult economic situation that pushes investors to invest in risky assets, including cryptocurrencies, which leads to the accumulation of bitcoins by long-term holders, the influx of capital into the crypto market, the development of DeFi and NFT directions;
Most recently, the SEC (the US Securities and Exchange Commission) stated that it has no plans to ban cryptocurrencies and in any other way “nightmare” the industry. On the contrary, the Commission is doing its best to help investors secure investments by properly and flexibly regulating the crypto market. Given the increased demand and interest of corporate and institutional investors, as well as a couple dozen ETFs awaiting approval, the market urgently needs regulation, not a ban;
A large investor bought $1.5 billion worth of bitcoins on the stock exchange, and not on the OTC market, at a time when there were only $17 million short positions. This led to a sharp and impulsive increase in the BTC rate from $52 thousand to $ 55 thousand.
In my opinion, bitcoin has every chance to update the historical maximum of $64.9 thousand. already before the November Fed meeting. At the same time, if nothing supernatural happens at the meeting, everything will be within the expected or suddenly softer than expected, which is good for risky asset markets, then by the end of the year, with a high probability, bitcoin will update ATH.
“The market situation is developing in favor of growth”
At least, outside the context of the traditional economy and the monetary policy of the Federal Reserve, the situation in the crypto market is exclusively in favor of growth. If two Chinese “cryptocurrencies” could not stop bitcoin, and the SEC does not plan to ban cryptocurrencies, what can hinder growth? Unless there are sudden sales of large bitcoin holders, but they have not yet, in my opinion, earned enough to start selling.
I believe that until the end of this year, it is worth waiting for a new altcoin season if bitcoin continues its bullish rally, since the market always follows the dynamics of bitcoin and is very dependent on the mood of investors who use BTC. Perhaps the new altseason will start a little earlier than bitcoin will continue to grow. However, even in this case, the growth will be associated with a good mood for bitcoin.
“I wouldn’t count on a global correction”
There is a probability of a global correction, but it can hardly be called high. Much will depend on the November meeting of the US Federal Reserve, at which it is planned to start cutting the quantitative easing (QE) program and curtail emergency stimulus. These procedures have already been incorporated by the market into the price after the September meeting and the subsequent correction. However, if the Fed does something beyond what it promised, that is, it takes a more “hawkish” position, then the risky asset markets will go down.
The Fed understands this perfectly well, therefore, in order not to cause a collapse in the markets, it will act as cautiously as possible. I would not count on a global correction until the next crisis, which, I am sure, will have to wait at least 5-7 years. The markets will slow down their growth as monetary policy tightens, yes, turbulence in the markets will increase periodically, but there will be no collapse. In the end, the economy, though stalling, is still recovering. The European Union has no plans to soften monetary policy so far, and QE is even thinking of increasing after curtailing the emergency stimulus program. There are no reasons for the collapse.
If, however, a global correction begins, then, like all assets in principle, bitcoin will also fall in price. Bitcoin is an excellent asset for preserving value and increasing capital in the long term, as well as an attractive speculative tool. However, bitcoin does not have the functions of a protective asset, given its volatility.
To make a protective asset out of bitcoin is rather an attempt to wishful thinking. Until the moment when bitcoin becomes a truly protective asset, it is still very, very far away.
The message contains information about the market movement, is not an investment study, should not be considered as investment advice and is a subjective point of view on the subject of the message of the author of the material. Past performance is not a reliable indicator of future price dynamics.