What will happen to the price of bitcoin? Should we wait for a correction in the crypto market?

Since the beginning of the year, Bitcoin has risen in price by 150%. But growth slowed down at the $20 thousand mark. The BTC rate failed to overcome three timesthis level, each of the attempts led to a rapid decline. As a result of the latter, the price of the cryptocurrency fell below $ 18 thousand, writes RBC Crypto.

What will happen to the price of Bitcoin in the near future and is the onset of a new “crypto winter” possible? Experts and analysts shared their opinions.

What do the current situation have in common with 2017?

For the first time bitcoin rose to the level of $20 thousand in December 2017.Then the cryptocurrency has set near this value its historical price maximum.But then the asset began to become cheaper and went into a phase of long-term decline.Thus, by December 2018, BTC quotes fell to $3.2 thousand.

There are several aspects that make the situation in the cryptocurrency market in 2017 and 2020 similar.FirstlyIn 2017, BTC rose by almost 2000% from January to December.Since March of this year, at the current moment, the property has added 400% of the cost.

The second aspect- dollar weakness.To combat the economic consequences of the crisis caused by the coronavirus, the US government has chosen a policy of quantitative easing, which, through additional emission of the dollar, leads to a decrease in its value. Because of this, the DXY index, which shows the strength of the dollar against a basket of six leading currencies in the world, has dropped from 100 to 91 points since May.

Three years ago, the dollar also depreciated greatly.From January to December 2017, the DXY index fell from 100 points to 88 points. In parallel, the bitcoin rate increased from $ 1,000 to $ 20,000.Then the situation turned around: DXY began to grow and reached 97.5 points by December 2018. The price of BTC for the same period fell to $ 3.2 thousand. Earlier, the analyst of the Amsterdam Stock Exchange Michael van de Poppe told about the correlation between BTC and USD.

Third aspect— behavior of miners.In recent days, people and companies mining cryptocurrency have been actively selling their reserves, as reported several times by the analytical services CryptoQuant and Glassnode. A similar situation was observed at the end of 2017. Then the pressure that coin sales by miners put on the price of BTC became one of the reasons for the start of a long-term decline phase. Later in the community she was nicknamed “cryptowinter”.

Representatives of the industry with many years of experience told what is the probability of a new "crypto-winter" in the digital asset market and what canbe her cause.

Crypto-winter will not be

Financial analyst of Currency platform Mikhail Karkhalev believes that the probability of a new phase of decline in the cryptocurrency marketThere is sufficient demand for bitcoin and other coins.

There are also no movements on the crypto-wallets of large BTC holders.This can be interpreted as investors' expectation of further growth, believesHe noted that even the sale of coin stocks by miners is unlikely to lead to a deep drop in its value.

"In my opinion, now the probability of a new crypto-winter is low.There is no demand for bitcoin from large sellers on the market, except for miners, but they mined 27.5 thousand in November.BTC, while Grayscale Investment alone bought 55,000 in November.BTC»Karkhalev explained.

He added that everything that is happening now on the cryptocurrency market speaksIt is more likely that the long period of trading in a narrow range with the gradual growth of the price of bitcoin, believesHe allowed the price of BTC to rise to $25,000 by the end of 2020.

Fundamental differences from 2017

Bestchange senior analyst Nikita zuborev agreed that there are no preconditions for a repeat of the 2017 scenario.Since then, the script industry has changed a lot. BTC has regained a significant market share - despite the new "DeFi fever" new investors, including institutional ones, have come into the sphere.The expert noted that the rhetoric around digital assets has also improved.

"The fact that bitcoin failed to break the psychological mark of $20,000 does not sayYes, the current level is overstated, but there are no prerequisites for a deep correction in the market.We assume that the current price reduction will not be delayed and will not lead toassets below $15-16 thousand.""I'm going to have to do it.

According to him, the most negative forecast is a long period of trade at current levels until spring 2021.But the "bears" in the cryptocurrency market probably won't appear before 2022-23.He stressed that the next year should be favorable for bitcoin.

Vitaly, Development Director at TradingView RussiaKirpichev also doubted the possibility of starting a new "crypto winter". He cited an important difference between the current situation and 2017. Then, after reaching a historic price record, massive sales followed, which brought down the market by almost 50% in just a week. This time, there was no such drop, the expert noted, now the sale of bitcoins is meeting with comparable support from buyers.

“The market is quite accepting of the current high price, asstable, satisfying all participants. Waiting for an instant crypto winter is an overly negative scenario. Rather, it will be a warm autumn or Indian summer ""I'm not going to do that," He said.

Market in a bullish cycle

THE managing partner ofEXANTE Alexei Kirienko also noted that there was no collapse in the price of bitcoin after rising to $20,000, as it was in 2017.Now this level does not seem inaccessible as before.Therefore, the expert warned about the risk of high volatility and reduction of the value of the coin, however, the latter canAdditional demand for BTC should also be provided by developing countries and economies that are subject to sanctions.

"In the foreseeable future, we may see another wave of corrections where bitcoin will receivesupport for buyers hunting for a discount", - suggested Kirienko.

He added that now cryptocurrencies are usednot only retail investors are in demand - big business is also interested in bitcoin. Kiriyenko cited MicroStrategy as an example. It has already invested $ 475 million in BTC, and in December announced that it was going to raise another $ 400 million for this purpose by issuing convertible bonds.

“For all fundamental indicators, we arein a bullish cycle, and the new phase of growth is unlikely to end at $ 20 thousand. Institutional and retail investors, miners, halving, as well as problems in the global economy against the backdrop of coronavirus and incentives from central banks, leading to the depreciation of currencies, are in support of bitcoin. The demand from buyers is high, and as long as investors believe in the growth prospects of bitcoin and its protective properties, it will continue to grow despite corrections and stops. ", - considers Kirienko.

Cause for concern

Over the past three months, the price of bitcoin has risen by more than 80%. It is natural that rapid growth can lead to overheating of the market and a protracted correction, Kiriyenko continued.

Another reason for the decline may bestrengthening measures to regulate the cryptoindustry, in particular stablecoins. In early December, a bill was introduced in the US Congress that would make illegal any products and services related to stablecoins if they do not receive regulatory approval.

"Another factor that could lead to volatility in the crypto market in 2021 is increased regulatory pressure on stablecoins, which will make it difficult for traders to close positions."- Kiriyenko explained.

Karkhalev added that a prerequisite forthe onset of a protracted correction and "crypto winter" may become excessive hype among ordinary people, not investors. When "hamsters" come to the market with money, the price can certainly skyrocket by 100-200%. This is a traditional scenario for a bloated market, that is, for a bubble, but in the case of the crypto market, such a development is now unlikely, he stressed.

“It is likely that there will be no more crypto winter.There will be systematic growth until the next global crisis, 7-10 years, with minor corrections, as, for example, on indices. Institutional money is on the market now, and it is very different from the money of "hamsters", - Karkhalev is sure.

From his point of view, a ban on Bitcoin and other coins by states, which could lead to a strong correction in the market, should also not be expected.Cryptocurrencies are now a recognized asset, both legally and psychologically.Rather, some kind of legislative framework will be created within which the digital money industry will develop, this is more than enough for the demand for it to only grow, Karkhalev summed up.

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