Global Crypto Market Sheds 5.5% in Value; Analysts Divided on Future Outlook
Summary:
On January 23rd, the combined value of all cryptocurrencies fell by 5.5%, lowering from $1.6 trillion to $1.5 trillion, with Bitcoin dropping below $40,000. Most altcoins mirrored this decline. Analysts like Bob Loukas and Peter Brandt view this as a signal of a bear market, predicting further price drops. However, others like Jurrien Timmer and independent analyst Ali are optimistic about future growth, indicating market anxiety could be temporary followed by a price uptrend.
On January 23rd, the collective value of all cryptocurrencies experienced a 5.5% daily drop, going from $1.6 trillion down to $1.5 trillion. Although there was a 55% increase in trading volumes, it was largely thanks to an extensive market sell-off. During this period, the cost of Bitcoin (BTC) plummeted to $38,521, sliding below the $40,000 mark. This downward trend was echoed amongst most altcoins, with Ethereum (ETH) dropping under $2,200 and Solana (SOL) momentarily lowering past its $80 threshold. Meanwhile, Binance Coin (BNB) failed to sustain its key support level of $300.
Given these events, trader Bob Loukas muses whether the recent peak of $49,000 might have marked the end of the BTC bull market. He shares that in his opinion, Bitcoin's weekly trend suggests it has hit its highest point. He further suggests that the lowest point may be reached by mid-February, with March possibly offering the best timing for low prices.
Prominent trader, Peter Brandt, mirrors this sentiment, highlighting Bitcoin's breach under the $40,000 mark as a sign of a bearish outcome. Basing his observations on patterns identified in a chart he shared on January 22, Brandt predicts a bearish target around $34,700.
However, Bitfinex posits a higher short-term harbor in the $38,000 - $36,000 range, with a long-term dip pre-halving around the $32,000 mark, prior to any recovery phase. Despite the prevailing downward trend, some analysts, including Jurrien Timmer, director of Global Macro at Fidelity Investments, perceive positive prospects for Bitcoin. He maintains that Bitcoin's value responds to the size and growth rate of its network, both determined by its scarcity features (stock-to-flow), and real rates (Federal Reserve policy).
Adding a glimmer of hope amidst the prevalent bearish mood is independent analyst Ali, who regards this phase as a brief setback before the uptrend resumes. He explains that such market anxiety, characterized by a price correction, has historically often occurred prior to an uptrend.
Ali suggests that this so-called "anxiety" causing the correction could be temporary, implying the onset of market recovery could be approaching. Investors should, however, exercise caution and conduct their own due diligence as all financial decisions carry associated risks. This news article is without investment guidelines or suggestions.
Published At
1/23/2024 10:40:37 PM
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