Home Ethereum After a short rally, Bitcoin and Ethereum prices fall. Here’s what comes next, according to these experts

After a short rally, Bitcoin and Ethereum prices fall. Here’s what comes next, according to these experts

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After a short rally, Bitcoin and Ethereum prices fall.  Here’s what comes next, according to these experts

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After a brief spike earlier this week, cryptocurrency prices came back down on Thursday.

Several experts we spoke to said prices are likely to fall again despite the upward trend, as pressure continues to mount due to macroeconomic uncertainty and a liquidity crisis among crypto companies.

And that’s exactly what happened.

Bitcoin fell below $20,000 on Thursday, down nearly 8% over the past seven days. Ethereum also experienced a sharp decline, falling to near $1,000. The biggest crypto is down more than 70% from last year’s all-time high of $68,000.

Volatility is normal for crypto price, and although bitcoin has fallen below the key $20,000 support level, it could easily rebound. For investors, a big question remains: is the crypto market on its way to recovery or is this just another false alarm, also known as bull trap?

Some experts say the signs point to a bullish trap and investors should beware, warning that the worst may be yet to come. persistent macroeconomic uncertainty – and bitcoin priceas well as other cryptocurrencies, could fall even further.

“While we’ve seen bitcoin and ethereum rally recently after creating lows around $17,500 and $880 respectively, we’re not confident yet to call a bottom up,” says Richard Usher, head of OTC trading at BCB Group, a crypto-finance firm. “The overall risk environment remains on edge, and while we believe risk assets will rally significantly towards the end of the year, we see risk biased towards another sell-first.”

Is the Crypto Market Recovering or Just a Bull Trap?

It is easy for investors to hope that the worst is over for the crypto market. Bitcoin price remained above $20,000 and Ethereum held above $1,100 on Tuesday, a significant jump from its 15-month low just two weeks ago.

But with war rages in Ukraine, rising interest rates, skyrocketing inflation and talk of an impending recession, the coast is far from clear, experts say. Many call what we see with crypto prices this week a bull trap.

This is when a stock or cryptocurrency reverses after a convincing rally and falls below a previous support level. Basically, it’s a false signal, tricking investors into thinking the market has finished falling and it’s a good time to buy.

Experts say there will likely be another sell off in the crypto market over the next few weeks or months. Crypto expert and educator Wendy O expects Ethereum to fall to $750 and bitcoin to fall to $10,000. Kiana Danial, entrepreneur and author of “Cryptocurrency Investing for Dummies,” predicts bitcoin will fall to $11,000, while venture capitalist Kavita Gupta calls for a minimum of $14,000 for bitcoin and $500 for ethereum .

Martin Hiesboeck, head of blockchain and crypto research at Uphold, says bitcoin holding over $20,000 has little to do with the crypto itself and more with the geopolitical situation. and overall macroeconomics, which he believes will not improve significantly in the near term. The crypto marketwho followed with stock markets lately, has been a victim of the massive sale of risky assets on the market.

“War in Ukraine, supply chain glut and inflation are by far the biggest concerns,” Hiesboeck says. “So far, bitcoin has not proven to be the inflation proof safe haven it was the biggest fans who believed him.

Is it the right time to invest in crypto?

The crypto market is volatile and highly unpredictable, so buying cryptocurrencies at any price is risky – let alone during a market downturn that might not go away anytime soon.

However, if you have assessed your tolerance and can accept the risk, experts say now could be a good time to enter the crypto market as prices are lower than they have been in years. There is no “perfect” time to enter the market, so keep in mind that price fluctuations are normal and be prepared for crypto prices to fall even further. Don’t invest in crypto if you can’t handle the sharp market fluctuations, which can sometimes be as high as 15% in a 24-hour period.

Additionally, you should only invest what you are willing to lose and after prioritizing other aspects of your finances, such as set up an emergency fundpay off high-interest debt and invest in a traditional retirement account like a 401(k).

Financial advisors recommend investing no more than 5% of your crypto wallet, and sticking to the two most established cryptocurrencies: bitcoin and ethereum. According to NextAdvisor Investability Score, bitcoin, and ethereum are considered better investments thanks to their longer track records and long-term value growth, among other key factors. Here’s how our score stands out for 10 cryptocurrencies that consistently rank among the top by market capitalization, excluding stablecoins, for reference:

PIECE OF MONEY NEXTADVISOR INVESTABILITY SCORE
Bitcoin (BTC) 80/100
Ethereum (ETH) 68/100
Solana (SOL) 56/100
Gimbal (ADA) 54/100
Peas (DOT) 54/100
Avalanche (AVAX) 52/100
XRP (XRP) 51/100
Binance Coin (BNB) 49/100
TRON (TRX) 39/100
Dogecoin (DOGE) 39/100
Updated on June 30, 2022

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