Trader Says More Legs Down and Then a Consolidation Phase Expected for Bitcoin Price This Summer

Trader Says More Legs Down and Then a Consolidation Phase Expected for Bitcoin Price This Summer

Debate over the state of the cryptocurrency market has been a dominant headline in recent weeks, as non-cryptocurrency media outlets excoriate Bitcoin (BTC) and DeFi investors for investing in assets with no fundamental value. At the same time, expert cryptocurrency analysts and traders have been scanning the charts for clues as to when the market will bottom out and turn around.

Novice investors are clearly on edge and some have predicted the demise of the burgeoning asset class, but for multiple cyclers, this new bear market is just another wildfire that will eventually lead to a healthier ecosystem.

The next steps for the cryptocurrency market was discussed at length with Cointelegraph contributor Crypto Jebb and independent market analyst Scott Melker. The two discussed their views on why Bitcoin’s value proposition remains strong and what the top cryptocurrency’s price action could look like in the future.

Here are some of the key points discussed by Crypto Jebb and Melker.

Bitcoin is being used as originally intended

Traders are primarily focused on Bitcoin’s spot price and lament the fact that it is not performing as the inflation hedge that many promised it would be, but Melker noted that its performance is highly dependent on the country and economic state of the country. where an individual lives.

Bitcoin may be down a lot in US dollar terms, but when compared to countries like Venezuela, which is experiencing hyperinflation, or Nigeria, which has a large unbanked population, BTC has offered people a way to preserve value. of your money and transact in an open financial system.

One of the biggest features highlighted by Melker is that Bitcoin is the first real asset that has given people all over the world the ability to opt out of the current financial system if it doesn’t work for them.

According to Crypto Jebb, Bitcoin is thermodynamically sound, that is, he defined that the asset retains the energy that is put into the system and does not “escape” it through things like inflation.

What direction will the market take?

As for the future of the market, Melker made sure to highlight that while cryptocurrency adoption may not appear to be moving quickly to those who have been in the market for years, “Bitcoin adoption is faster than the internet. It’s a hockey stick-shaped curve that’s being absolutely parabolic.”

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Both Crypto Jebb and Melker suggested that the paradigm shift toward cryptocurrency investing just needs more time because people who have been conditioned to invest in things like a 401k or Roth IRA and most investors are trained to fear risk.

Responding to potential critics who cite Bitcoin’s volatility as a primary reason to avoid cryptocurrencies, Melker highlighted the struggles equity markets have had of late, citing the poor performance of stocks like Netflix, Facebook, PayPal and mutual funds. Ark by Cathie Woods.

Melker said,

“Last month was the first time I think I saw research from Messari that said there wasn’t one place you could put money in an asset class and store some sort of value. And if you stay in cash, you lose.” 8% of your purchasing power doing that”.

Expect more short-term declines

According to Melker, the current market situation is bad and, in the short term, it is important to remember that “the trend is your friend” and that further declines are likely.

That said, Melker noted that there are some events ahead that could help the market out of its lull, including the Fed’s tightening cycle, which has historically put pressure on asset prices during the first three quarters of the tightening cycle. until the market adjusts to the new reality.

Melker said,

“My best guess is that we have a very choppy, boring, low volume, low liquidity summer. Maybe we hit new lows, or maybe we just move from 17,500 to 22,000 or 23,000, something like that. And then we’ll start to really see what is the market made of when the end of the year arrives”.

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