Crypto experts warned the community about a possible “volatile” market after major cryptocurrencies, including Bitcoin, saw a significant market plunge last week.
On Sunday evening, Bitcoin lost 1.4 percent of its market valuation to $922.5 billion or $19,039.14 per unit. Before that, Bitcoin’s value slid below $19,000 for the first time since June. Meanwhile, Ether fell 2.6 percent to $1,276.90 per coin. Another major coin, DOGE, was at $0.06 or dropping by 2.25 percent.
Expert trader Michaël van de Poppe wrote on Twitter that the market had closed “terribly” in the previous week. He reminded investors to pay attention to the correlation between Bitcoin and major stock indices, such as S&P 500, Dow Jones and NASDAQ. The trader said he would also monitor the upcoming ISM report, job openings and Organization of the Petroleum Exporting Countries (OPEC) meetings.
The coming week will be very volatile, as markets closed terribly last week.
— Michaël van de Poppe (@CryptoMichNL) October 2, 2022
Personally mostly watching ISM tomorrow, job openings & OPEC meetings.
Also watching the correlation between #Bitcoin & indices. Last week indicated more strength in #crypto.
Like Poppe, crypto analyst Alessio Rastani also stressed the importance of observing the stock market. He said that the movement in the stock market was “critical” to determine whether the economy would head a short-term or a long-term recession. The recession might last up to 2024 and affect the price of Bitcoin.
Rastani said that the S&P 500 might be rallying in the coming days. He added that if the rally failed, the U.S. might enter a lengthy recession “very close to similar to 2008.”
Craig Erlam of OANDA described last week as “choppy” for Bitcoin since the coin failed to show significant moves in both directions. Erlam, nevertheless, still considered Bitcoin a resilient currency.
“Perhaps we are seeing a floor forming a little shy of the early summer lows around $17,500, although that will very much depend on risk appetite not plummeting once more which it very much has the potential to do,” Erlam said.
ZX Squared Capital co-founder CK Zheng explained several factors influencing Bitcoin’s price volatility, including rising inflation and the possibility of tightened monetary policy by the Federal Reserve. However, Zheng insisted that the crypto market would be stable by 2023.
Investors selling Bitcoin assets
Crypto Fear & Greed Index released by Alternative.me showed that investors were worried about going into a new trading week after last week’s result. Data released by CryptoQuant revealed that a number of long-time holders had sold their Bitcoin assets “ at huge losses” to avoid further losses.
CryptoQuant analyst Edris wrote, “Many holders who have entered the market during the 2021 bull market and above the $30K mark, have recently capitulated and exited the market at an approximate 50% loss.
“These types of capitulations tend to occur during the last months of a bear market, pointing to a potential bottom formation in the near future.”
Renowned businessman and author Robert Kiyosaki, however, considered Bitcoin’s decline and the U.S. greenback’s strength as opportunities to purchase the cryptocurrency. Kiyosaki predicted that the Fed would “pivot,” causing the dollar’s value to drop. He said that the U.S. currency might experience a “collapse” just like the U.K. pound sterling, which recently fell to its all-time low against the dollar.
In recent months, the U.S. dollar has been gaining strength as a result of the Fed’s strict monetary policy. The federal body adopted the interest rate hike method to curb inflation. While the U.S. dollar saw new two-decade highs, the overall crypto market valuation dropped by 55 percent.