According to the CFO of the ASTL investment project, Konstantinas Sizovas, bitcoin may need to break through the $25,000 level in the near future in order for interest in risky assets to recover. Konstantinas Sizovas believes that it is too early to talk about the end of the bear market for cryptocurrencies. Because bitcoin, as well as other risky assets, will continue to be strongly affected by the constant increase in interest rates by the US Federal Reserve System (Fed). “The tightening of the Fed’s policy, despite the risk of a recession, could be a strong “headwind” for most risky assets, in particular cryptocurrencies. Investors who prefer to buy and hold may need insurance, as the bear market may not be over yet,” — the analyst thinks. He suggested that cryptocurrencies have not yet reached their price floor. Rising prices for these assets earlier this year could make them “vulnerable to a resumption of 2022 downward trajectories,” Sizovas said. Most likely, March will show how stable digital currencies are now.
The analyst also noted that bitcoin may need to break through the resistance around the $25,000 mark in the near future in order for interest in risky assets to recover. Otherwise, he called tactical short positions in cryptocurrencies justified. Recall that on February 2, the bitcoin rate rose above $25,000 for the first time in six months. However, having reached $25,200, the value of the asset dropped. Within two weeks, the first cryptocurrency traded in the range from $22.9 thousand to $24.9 thousand. On the morning of March 3, the bitcoin rate fell by $1.2 thousand within an hour. The cost of the first cryptocurrency decreased by 5%, dropping from $23.4 thousand to $22.2 thousand. According to CoinGecko, at 14:30 Hong Kong time, the asset is traded at the level of $22,355 thousand, the daily decrease is 4.6%. Cryptocurrency rates began to fall at 12:00 Hong Kong time – this is the opening time of exchanges in Singapore and Hong Kong. The total market capitalization of the crypto market decreased by 5.3% in an hour – from $1.12 trillion to $1.06 trillion. Against the backdrop of a sharp decline in prices for cryptocurrencies, the positions of traders who traded with leverage were liquidated. According to the Coinglass service, over the past 12 hours, transactions worth $221 million were forcibly closed. The largest number of liquidations was in pairs with bitcoin – $79 million, followed by Ethereum with a loss of $45 million.
The latest developments can be explained by the fact that investor sentiment has been volatile over the past week due to data on larger-than-expected growth in US household consumption (PCE). This index suggests that inflationary risks remain, which increases the chances of raising the key rate at the next meeting of the US Federal Reserve. But for almost the whole week, the crypto market managed to hold on and not succumb to the pressure of the bears. However, reports of problems with the Silvergate bank acted as trigger news, and the crypto market succumbed to a small wave of panic, which led to a sharp drop in the price of bitcoin by 5%. The bank was engaged in servicing crypto companies, but due to regulatory uncertainty and increased risks associated with crypto assets, it is reducing its presence in the crypto market. This means that crypto companies have even fewer partners from the traditional banking sector. In the short term, this may still affect the bitcoin rate, but it is unlikely to be significant. The current price already takes Silvergate into account. At the same time, everyone is afraid of a repeat of the situation with the collapse of the FTX exchange; Coinbase, Circle, Paxos, Crypto.com, Gemini, Bitstamp and Galaxy Digital have already abandoned operations with the bank.
As expected earlier, the crypto market will show growth in the absence of negative news, and decline with such statements. There are still fears that the collapse of FTX has launched a chain reaction in the market, investor confidence in crypto assets is being lost, which causes an outflow of funds from the market and “drops” currency quotes. Most likely, now bitcoin will fluctuate around $20-22 thousand. If there is no new negative information, a slight rebound is possible. Otherwise, there are no fundamental positive moments for the market growth yet. The main event for the crypto market this month is the Fed meeting on the key rate on March 21-22, and the unlocking of Ethereum in staking was postponed until April. During the discussion of the Shanghai hard fork on March 2, which was attended by all the main developers of the network, it was decided that the update, after which the withdrawal of locked tokens will become available, will occur at the earliest in the first week of next month.
Shanghai is an update that will allow Ethereum holders to withdraw locked coins from staking. Over 16.6 million ETH will be available to network validators for withdrawal to their own wallets. Previously, Shanghai’s mainnet update was scheduled to take place in March. On February 28, a successful “rehearsal” of Shanghai was held on the Sepolia test network. At the meeting, the developers noted a few minor issues found after the Sepolia update; but none of these are expected to have a negative impact on Shanghai’s deployment.
An update on the latest Goerli testnet is scheduled for March 14th. The meeting participants agreed that after that it would take at least two weeks to check the results and finalize the hard fork of the main network. “So imagine the Goerli update happens on the 14th, everything is going well, on the 16th we decide to move on with the mainnet update. I think the earliest this can happen is the first week of April” – said project coordinator Tim Beiko. Other developers during the discussion suggested that the update will occur in the second week of April.
Having said all of the above, investors are advised to take some time to think before making any investment. One of the legitimate forms of investment is, for example, the ASTL investment project, which allows investors to have the opportunity to directly invest fiat and cryptocurrency assets in a stable passive income that obviously exceeds inflationary expectations and is not subject to any sanctions, blocking and confiscation. The ASTL project is a simple and elegant solution for potential investors – an investment in the development of the real sector of a diversified portfolio of cryptocurrencies, with a fairly high ROI (up to 12% annually) with payments in stablecoin (USDT). Details can be found at https://astl.io.
Very energetic post, I liked that a lot. Will there be a part 2?