Experts Are Trying to Predict to What Levels Bitcoin (BTC) and the Market Will Drop

Experts Are Trying to Predict to What Levels Bitcoin (BTC) and the Market Will Drop

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At the end of last week, the market fell fast against the background of the collapse of traditional markets. Bitcoin could drop to the levels of summer 2021.

On July 20, 2021, BTC decreased below $29K. Experts admit that now bitcoin may also fall below $30K. The decrease of cryptocurrencies was provoked by several negative news. On January 20, the Central Bank of Russia announced the possibility of a complete ban on cryptocurrencies in Russia. Russians hold more than $92 billion worth of cryptocurrencies, according to Bloomberg. Jason Deane, an analyst at consulting firm Quantum Economics, said:

– Once fear sets in, it takes a while to break and you simply have to wait for capitulation before you can move back to “normalized” ranges.

The expert predicts a fall in the short term before the market returns to growth. Jason Dean’s long-term outlook is positive.

In terms of technical analysis, the drop below $40K turned this support level into a resistance level. The growth of bitcoin will be possible only when the first cryptocurrency overcomes this milestone. But this should not be expected in the short term. The cryptocurrency market is increasingly correlated with the stock market. But given its low volume compared to fiat markets, it is more susceptible to general sentiment. Therefore, a 1% drop in the S&P 500 causes a 10% drop in BTC.

Lucas Outumuro, a researcher at crypto research firm IntoTheBlock, notes that bitcoin and the broader crypto market behave like a beta asset, meaning it moves in tandem with broader markets and is more affected by negative sentiment (“Bitcoin and the broader cryptocurrency market as a whole are acting as a high-sentiment beta asset – meaning it is moving in tandem with the broader markets and is more impacted by the recent negative sentiment”). The correlation of the two markets is hardened by the falling revenues of technology companies and macroeconomic concerns, according to the expert.

Bitcoin is down almost 50% from its all-time high, while the S&P 500 is down 7% from its high and the NASDAQ 100 is down 10%. Altcoins are depreciating even more because, in the eyes of investors, they are more risky assets. The market can only bounce after bitcoin bounces. The price of $35K is considered a good support level for BTC, but a stronger support level is $30K.