What can bring down the crypto market
Experts told RBC-Crypto about the most negative scenarios that could happen on the crypto market: what could cause the rate of the leading cryptocurrency and other digital coins to drop.
Geopolitics
Today the market is positive: it expects growth, lower rates, and a continuation of the rally, said Cifra Markets lead analyst Alexander Kraiko. But let's imagine that everything goes wrong and Bitcoin starts to decline, the expert says.
According to him, the most pressing risk now is the escalation of the conflict in the Middle East. If the Strait of Hormuz is blocked, this will lead to an increase in oil prices, followed by other goods, and inflation will rise again, the analyst explains. He specified that in such a situation, the US Federal Reserve System (FRS) will keep the high rate longer, and this will hit the entire market, including Bitcoin.
However, now, judging by the growth at the beginning of the week, the market is not factoring in such a scenario: based on the current dynamics, investors believe that even if the escalation continues, it will not have a serious impact on the economy, Kraiko noted.
“Investors will go to cash”
If the global situation is allowed to worsen — in geopolitics, macroeconomics, monetary policy — Bitcoin could be hit twice, says Technobit CEO Alexander Peresichan. He explained that, on the one hand, high interest rates and an expensive dollar make investments in illiquid assets, including cryptocurrencies, less attractive, on the other hand, if global upheavals begin, investors will go to cash, dollars, and government bonds, not cryptocurrency.
“At such moments, Bitcoin is not perceived as ‘digital gold’, but rather as a speculative asset – it is the first thing people get rid of,” says Peresichan.
He specified that this could lead to a chain reaction on the market: first, the price is pressured by news and macroeconomics, then a technical collapse is launched: liquidations, exit from spot exchange-traded funds (ETF), panic among retail investors. Bitcoin could well lose 20-30% from its peak values – simply against the backdrop of worsening sentiment and flight from risk, the expert believes.
“The most negative forecast”
The most negative forecast for the crypto market involves a confluence of several factors, said Roman Nekrasov, co-founder of the ENCRY Foundation. For example, the escalation of the Middle East conflict with its impact on oil and gas supplies, the lack of positive dynamics in resolving the trade conflict between the US and China, while accelerating inflation in the American economy and, as a result, maintaining the key rate in the US unchanged.
“At the same time, the crypto market usually reacts impulsively, with sweeping fluctuations. For a negative scenario to materialize, all these events would need to be reported sharply in the news: for example, a sudden closure of the Strait of Hormuz and a jump in oil prices, Trump's statement about refusing to negotiate tariffs with China, a sharp jump in consumer price growth in the US,” Nekrasov explained.
In this case, an avalanche-like sell-off could occur, when Bitcoin first goes down under the influence of negative news, and then market participants intensify the sell-off, exiting the asset in panic, the analyst says.
Fall levels
During the fall, several support levels are possible: $95 thousand as a result of negative news, and then $88 thousand and $80 thousand as a result of several waves of sales, if any, Nekrasov believes. According to his estimates, Bitcoin is unlikely to go below $80 thousand – this is prevented by high institutional support and the existence of spot Bitcoin ETFs.
According to Peresichan, Bitcoin may fall to $70,000, but it is unlikely to fall lower, even in a tough scenario. The asset will hold the bar, because now there are fundamental anchors on the market – institutional, ETF, public companies with BTC on the balance sheet, the expert believes.
According to Kraiko, we should not rule out a sell-off of bitcoins from ETFs. This scenario may be realized against the backdrop of a stock market decline. According to the expert, even if geopolitics bypasses the market, pressure may come from another direction: for example, through new duties, harsh rhetoric from the Fed, or the emergence of a new “black swan”.
“If a correction in the stock market begins, funds holding BTC through ETFs may begin to reduce positions. In a risky environment, such structures tend to sell – not because of mistrust in bitcoin, but simply because it is part of a capital management strategy,” the analyst says.
And if a full-fledged downtrend starts from the current levels, then the first target will be $80 thousand, then a rebound and a decline to the $68 thousand zone, Kraiko believes. And closer to the end of the cycle – a possible test of the 200-week moving average (200WMA, the average value of closing prices over the last 200 weeks (about four years)), which in a couple of months will be around $52 thousand.
Altcoins
For altcoins, the sell-off may be deeper than for bitcoin, Nekrasov believes. In his opinion, Ethereum, despite the presence of spot ETFs on the altcoin, may collapse to $1700, as it has already lost the trust of investors, who did not see the desired growth during the previous bull run.
Peresichan also drew attention to the fact that the altcoins are in a worse situation than the leading cryptocurrency: they do not have such trust, and if everything goes badly, they can really fall two or three times. But for Bitcoin itself, this could be a deep correction rather than a collapse, the expert added.
Источник: cryptocurrency.tech
