What to expect from the cryptocurrency market now
Experts interviewed by RBC-Crypto assessed the prospects of the crypto market against the backdrop of geopolitical events in the Middle East, and also pointed out factors that are worth watching in the near future.
Strong trend
The volatility in the crypto market over the past few days has not changed the main trend towards rising prices of crypto assets, says leading analyst at crypto broker Cifra Markets Alexander Kraiko.
“Such geopolitical surges often cause short-term corrections, but do not become turning points. This time the situation developed exactly in analogy with previous aggravations between Iran and Israel – the market quickly bought out the decline, and the trend remained in force,” he said.
But even despite the continued global bullish trend, experts do not expect a strong price increase. They generally agree that Bitcoin will continue to trade in a wide range.
“Amid geopolitical and economic uncertainties, the crypto market is likely to remain in a wide sideways range. Bitcoin will continue to trade in an extended range of $102-107 thousand. Ethereum may try to return to $2.6-2.7 thousand after a sharp drop to $2.3 thousand earlier in the week,” said Ryan Lee, lead analyst at Bitget Research.
Increased volatility should be expected this week, says ENCRY Foundation co-founder Roman Nekrasov: “If tensions do not increase, Bitcoin may hold at $105,000. But any new blows or statements may cause the market to collapse again, and then a cascading sell-off may occur on the crypto market, which will lower BTC back to $95,000.”
Altcoins
In these uncertain geopolitical conditions, Kraiko also saw opportunities for altcoins to grow. He pointed to the high level of Bitcoin dominance as a trigger: “Yesterday, the maximum of Bitcoin dominance since the beginning of 2021 was updated – BTC took up more than 65% of the entire crypto market capitalization. However, today, against the backdrop of the growth in the price [of Bitcoin], dominance began to decline.”
The market is at an important technical level, the expert believes, from which a correction of dominance may well begin, and this will open a window of opportunity for strong growth of altcoins.
The Bitcoin Dominance Index, Bitcoin Market Share, or Bitcoin Dominance is the ratio of Bitcoin's market capitalization to the market capitalization of the entire crypto market. Factors that influence this metric include changes in Bitcoin's price, altcoin valuations, the growth of stablecoins, market conditions, and the emergence of new cryptocurrencies.
Macroeconomics
An important factor for further price movement is macroeconomic data from the US. And in this area, experts see more positive signals.
“Data from the US is also important – inflation and consumer activity. They will affect expectations for the Federal Reserve System (FRS) rate and, accordingly, the behavior of investors in crypto assets,” Nekrasov noted.
Lee also noted that markets will be watching data on inflation, unemployment and consumer activity, “which could impact expectations for the Fed's rate.”
How the Fed's Rate Decision Will Affect the Cryptocurrency Market. What You Need to Know In fulfilling its mission, the Fed adjusts monetary policy by lowering or raising the benchmark lending rate, which can impact all financial and trading markets. When the economy is stable, the Fed may begin to ease monetary policy, i.e. lower the lending rate, thereby creating a more attractive climate for investors. Conversely, in conditions when crises arise in the economy, the Fed may tighten monetary policy, which, in fact, worsens the investment climate and, as a result, negatively affects trading markets.
It is also worth watching the rhetoric of the Fed representatives. According to Kraiko, this could serve as an additional bullish factor: “The market is already discussing the possibility of the first rate cut in July. And cheap money is fuel for risky assets. First of all, for altcoins.”
Источник: cryptocurrency.tech
