Bitcoin (BTC) May Continue Its ‘Bear Market’ Says a trader amid hope that a US dollar reversal could soon improve BTC price action.
In his latest YouTube update on May 2, Cointelegraph contributor Michaël van de Poppe argued that the current rise in USD would not last long.
Dollar Strength Reversal “Close”
Bitcoin is still under pressure as both stocks and cryptocurrencies grapple with the reality of a major policy change from the US Federal Reserve.
The Fed, which will pronounce itself this week, intends to end the era of “free money” since the COVID crisis of March 2020 once and for all, and risky assets should be the first to suffer.
The COVID crash saw the previous spike in the US Dollar Index (DXY), which then declined as Bitcoin pushed crypto markets to new highs.
That inverse correlation has since changed once again, and now, with DXY at twenty-year highs, cryptocurrencies are on the receiving end of the pain.
However, Van de Poppe notes that compared to previous DXY bull runs, Bitcoin has lost considerably less in USD terms. In 2014, for example, the BTC/USD pair lost over 80%, while the draw from its all-time highs in November 2022 so far has only peaked at 55%.
“Right now, we’re seeing this implied strength, and I think the dollar is entering a period where that move is running out,” he said, adding that a reversal was “close.”
However, Van de Poppe said that the “Bitcoin bear market could continue,” and if so, downside targets now extend beyond $30,000 to $25,000.
“Massive speculative excesses”
As for the long-term view, mainstream analysts continued to favor Bitcoin’s enduring strength after a period of future pain.
Speaking with Wall of All Streets podcast host Scott Melker on May 2, Mike McGlone, chief commodity strategist at Bloomberg Intelligence, said that a reset of crypto and traditional markets alike was “already happening”.
“This is a receding tide of massive speculative excesses across markets, cryptocurrencies were a great leading indicator and now we are turning the tide and it is a question of how far,” he explained.
“This week, the Fed will raise 50 basis points for the first time in years; I could go back and check, but I haven’t seen that in a long time.”
As before, McGlone, however, predicted that Bitcoin would ultimately benefit from the next turmoil.
“I think that will be part of the trigger that will remove the rest of the excesses in the market, especially stocks, and then Bitcoin will come out ahead, and it is already happening.”he added.
The BTC/USD pair was trading at $38,900 at the time of writing, according to data from Cointelegraph Markets Pro and TradingView.
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 do your own research when making a decision.
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