Why Bitcoin Could Return To $28,000, But By The End Of 2022

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Goldman Sachs analysts believe Bitcoin and the crypto market could see some relief, but only a shorter and medium term turmoil. A recent report by the banking institutions claims that the crypto market has moved in tandem with the US stock market and thus it has been affected by the macroeconomic environment.

Related Reading | Why Bitcoin Could Collapse Another 50%, Says Michael “Big Short” Burry

The analysis was done by Marion Laboure and Galina Pozdnyakova and predicts a 30% accumulation for Bitcoin by the end of 2022. This is still far from the previous all-time high of the cryptocurrency of around $ 69,000.

The report does not provide reasons that support the bearish theory. Analysts believe that the correlation of Bitcoin with the stock market will continue to play against it, and while they predict a rebound in stocks, they believe the price of BTC will lag behind in terms of yield.

For the stock market, Goldman Sachs ’analysis predicts a resumption of its bullish momentum and a possible rebound to its January 2022 levels. In the meantime, Bitcoin could reach $ 28,000, which is more than $ 10,000 less than its January 2022 levels.

Why will BTC undermine the stock market? It is unclear. As usual for legacy institutions, analysts discarded the basics of Bitcoin and compared it to the diamond market, which they claimed flourished on the back of “marketing”:

By marketing an idea rather than a product, they have built a solid foundation for the $ 72 billion a year diamond industry they have dominated for the past eighty years. What is true for diamonds is true for many goods and services, including Bitcoins.

Analysts have written the following about the factors that contribute to the complexity of measuring value in Bitcoin and other cryptocurrencies, and why this could increase its downside risk:

Stabilizing token prices is difficult because there are no common valuation models like those within the public equity system. In addition, the crypto market is very fragmented. The crypto free fall could continue due to the complexity of the system.

Bitcoin BTC BTCUSD
BTC’s price trends to the downside on the 4-hour chart. Source: BTCUSD Tradingview

The Short Term Horizon For Bitcoin

As reported by NewsBTC, experts better acquainted with the crypto industry believe that Bitcoin and other large cryptocurrencies along a market limit continue to follow the stock market. Former BitMEX crypto exchange CEO Arthur Hayes expects this correlation to contribute to the decline in the price of BTC.

However, at some point during 2022, the crypto market will begin to decouple from stocks and the U.S. major stock indices, the S&P 500 and Nasdaq 100. The bullish momentum for the digital assets could be supported by a decline in both the value of equity. markets and a downward trend in correlation with cryptocurrencies.

Related Reading | Ethereum (ETH) Curves To $ 1,000 While Doubt Fills Cryptographic Markets

As Hayes explained, here’s when you want to pay attention:

In order for me to raise the flag to support fiat sales and crypto buying before NDX meltdown (30% to 50% low), correlations across all time frames should tend to be demonstrably lower.

Source

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