Ton Weiss named the condition under which the rate of Bitcoin within the framework of the current correction will decrease by more than 70% from the historical maximum of $69 thousand.
Trader Ton Weiss admitted that the bitcoin rate within the framework of the current correction could fall to $20,000 per coin. According to the analyst, this will happen if the asset will break through the 50-week moving average (MA) in the area of $47 thousand and will fix below it. Weiss argues that in this case, the price of bitcoin will go down to the 200-week moving average to get support.
Weiss reminded that such situation took place last March when the price of the first cryptocurrency fell below $5,000. According to the trader, then bitcoin successfully managed to push back from the 200-week moving average and return to active growth.
The analyst said he considers bitcoin’s decline to $20,000 an unlikely but possible scenario. Weiss predicted that bitcoin will be able to hold above the 50-week moving average, which is around $40,000.
On December 15, CEO of cryptocurrency exchange Kraken Jesse Powell admitted that bitcoin price can fall below $40,000 during the current correction. According to Powell, it will be a good opportunity to buy the asset.
The cryptocurrency market is quite volatile. What effect will the Fed’s actions have on bitcoin?
The regulator said on December 15 that it will speed up the winding down of its stimulus program. Experts explained why this raises the risk of a new digital asset crash and a deeper correction.
The Federal Reserve of the United States said on December 15 that it would speed up the halving of its bond-buying program from $15 billion to $30 billion each month. Purchases of US Treasury bonds will be reduced by $20 billion, and purchases of mortgage bonds will be reduced by $10 billion.
Bitcoin grew in response to the regulator’s comments. The cryptocurrency’s value increased to $49,500. (6.4 percent). The asset was valued at $49,100 on December 16.
The concentration is on all markets
According to Nikita Soshnikov, director of the cryptocurrency exchange service Alfacash, the Federal Reserve’s decision to speed the winding down of the economic stimulus program will result in a reduction in cash injections into the stock market, lowering its growth rate. According to him, the crypto market is particularly unstable as a result of the Fed’s decision, which could result in a stock market crash, which will inevitably drag down digital assets.
“At the same time, even if the crypto market crashes, it is highly likely to recover quickly enough and resume growing, as it did in March 2020,” the analyst said.