Experts Predict Bitcoin Can Fall up to $28K

Bitcoin (BTC) plummeted below $30,000 on Tuesday, as both traditional financial markets and cryptocurrencies struggled from a sell-off triggered by aggressive monetary tightening by the United States Federal Reserve and recession risks.

The most recent drop has sent bitcoin to a 10-month low and its lowest price this year.
Last year, the largest cryptocurrency by market cap went below $30,000 on July 20, 2021, when it touched $29,301 before recovering.

“The recent crypto slide is strictly based on the tech share-led sell-off and not fundamentals for the cryptoverse. Bearish momentum could take bitcoin towards the $28,500 level, but that might start to be where some long-term bets come into play. The long-term fundamentals remain in place for bitcoin, but a return to record highs will take a long time. Bitcoin will start to stabilize when the bloodbath on Wall Street ends and right now many investors are still in panic-selling mode.”

Edward Moya, senior market analyst of Oanda

The Federal Reserve raised its benchmark interest rate by 50 basis points (0.5 percentage points) this month and is expected to do so again at its next meeting in June.
Bitcoin’s price decline is part of a broader market sell-off.
All three leading stock market indices are down, with the S&P 500 down 3.2 percent at 3991. The Nasdaq and Dow Jones Industrial Averages were also trading lower, at 11,623 and 32,245, respectively, down 4.5 percent and -2 percent.
According to analytics firm Kaiko, the correlation coefficient between bitcoin and Nasdaq reached an all-time high of 0.8 during this market sell-off. This is seen as a strong positive association.

“If the Fed continues to raise rates through June and July, we’ll probably continue to get markets going down all the way through the summer. My expectation though is that due to midterm elections coming up in November, we’ll probably see the Fed pausing or even lowering rates starting at the September meeting, so that will be the catalyst. We could see the market going back up at that point.”

Steven McClurg, Valkyrie chief investment officer and co-founder

According to recent Glassnode statistics, bitcoin is down roughly 55% from its November peak, and 40% of investors are currently underwater on their investments.

That proportion rises even higher when you exclude short-term investors who bought in within the previous six months, when the price of bitcoin peaked at roughly $69,000.

In the previous month alone, 15.5 percent of all bitcoin wallets saw an unrealized loss as the world’s most popular cryptocurrency sank to $31,000, matching the decline in tech equities. The strong link between Bitcoin and the Nasdaq calls into question the cryptocurrency’s role as an inflation hedge.

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