Key facts:
In the last 13 weeks, there have only been two showing rising BTC price.
The return of bitcoin in the last 7 days is 4.45%.
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Despite a moderate rally in the price of bitcoin (BTC) in the last six days, June has been the worst month for the digital currency since November 2018. Still unfinished, in June I know accumulates a retracement of 33.77%which takes its price to a deterioration of 56.1% so far this year, and to a drop of 69% from its all-time high on November 9, 2021.
In the context of this pronounced bearish phase, market participants they debate whether the price of bitcoin would have already bottomed out, or if, on the contrary, there is a chance that it will start to fluctuate in a lower price band. At the time of writing this article, the price of bitcoin is USD 21,430 as can be seen in the CryptoNews Calculator.
Consulted by CriptoNoticias about the possible evolution of the price of bitcoin, the trader and analyst Eduardo Gavotti, director of Gavotti SGP, says that he does not believe that it has reached its minimum in this cycle. “All scenarios are possible, but I wouldn’t be surprised if BTC hits $12,000 levels and consolidates for a while in a fairly low range before the next bull run,” says Gavotti.
The specialist places this range between USD 11,000 and USD 16,500, and estimates that the consolidation period may last between 6 and 12 months. Among the reasons why he does not see a minimum at the moment, is the uncertainty about the direction of the world economy that configures a context global risk-off. This means that investors tend to avoid risky assets.
Fed statements do not affect bitcoin
The president of the Federal Reserve (Fed) of the United States, Jerome Powell, declared last Wednesday before the US Congress that bitcoin and cryptocurrencies should be regulated like the rest of financial assets. Despite these statements, the price of the first cryptocurrency it kept fluctuating for the rest of the week, in a range close to USD 21,000.
Powell confirmed that inflation is well above the level that the Fed had set as a target for this year of 2%. Not only is the inflation expectation for 2022 higher than 4%, but the monthly reported inflation has been growing noticeably since January. At the beginning of June, as reported by CriptoNoticias, the increase in the prices of products and services in May 2022 was 8.63%, the largest increase in four decades.
The odds of a global recession rise
Major financial institutions such as Deutsche Bank and Citigroup agreed at the estimate the probability of a global recession occurring in the next 12 months at 50%, as reported by CriptoNoticias. At the top managerial levels of the main world corporations there is also fear of a sharp contraction of the economy.
60% of the CEOs consulted in a global survey expect a recession before the end of 2023. JPMorgan also sees an 85% probability of a recession, considerably higher than those estimated by Deutsche Bank and Citigroup.
Featured chart of the week
Generally, a global analysis of the price of bitcoin is done with monthly candles, which avoids inter-day or weekly movements. In this chart, two-month candlesticks are chosen, which allows us to appreciate the trends in the price of bitcoin, although putting to one side the high variability of smaller time scales.
Points are plotted on the graph when the price bottoms out and starts to recover until it reaches the previous top (area shaded in red). The hypothesis raised in the graph presents the important white candle (descending) of May and June, which represents a 44% decrease in price, as the one that would be marking the bottom of the price of bitcoin.
Binance CEO believes that bitcoin will take time to return to a maximum
Changpeng Zhao (CZ), the CEO of Binance, one of the world’s largest exchanges, believes that the current bear market should not worry bitcoin traders and investors that much. “I think the worst part is probably over. We’ve seen a pretty steep drop,” the executive said at the event. World Zero Forum. CZ believes that it is very positive that bitcoin remains above $20,000 and that the expected rally may take up to two years. This would coincide with the next halving, which represents the halving of bitcoin issuance.
