Inflation has been a key component of the crypto winter of 2022, and investors tend to dump higher-risk assets when the Fed raises interest rates to address inflation. While bearish news is already baked into Bitcoin’s price, other drops might be possibilities, especially if inflation climbs faster than expectations. inflation numbers in decades.īitcoin prices could easily fall to new lows if the macroeconomic environment deteriorates further, experts say. In 2022, the Federal Reserve has aggressively raised interest rates to combat the highest U.S. “I am watching as a potential long-term target.” Does Inflation Spell Trouble for Crypto?Īnother key difference between the 2018 Bitcoin sell-off and the 2022 crypto winter is the macroeconomic environment. “Will that mark the low for BTC? I am not so sure,” he says.
He also says he’s not convinced the Bitcoin bottom is in just yet, given the selling pressure in Bitcoin seems to be strong, and “ease of movement” is the downside for now. “The long-term trend for BTC is still down after breaking support around $30,000, which at the same time marked the completion of a big top formation,” de Kempenaer says. Still, upside beyond that point may be difficult. Julius de Kempenaer, senior technical analyst at, says the Bitcoin chart suggests a breakout price above $22,500 could carry Bitcoin to its next resistance level of around $27,500.
Some analysts rely on technical analysis of Bitcoin’s price chart to determine important near-term support and resistance levels, including a potential price level for the Bitcoin bottom. So it can be difficult for analysts and other experts to assign an appropriate value or price target for the crypto.īitcoin bulls argue that like gold, Bitcoin’s value is tied to its scarcity, as the crypto holds a fixed cap of 21 million total coins.Ī fixed supply and no intrinsic value means Bitcoin prices are determined purely by market demand, making crypto market investor sentiment the most important element in predicting where Bitcoin prices are headed.
Bitcoin Value: BTC Is Hard to Valueīitcoin does not generate cash flow, revenue or earnings, and it’s not backed by any assets holding intrinsic value. In addition, investors lost confidence in the stablecoin market in recent months following the collapse of TerraUSD (UST) in May. Crypto lending firms Voyager Digital and Celsius Network were all recently forced into bankruptcy after facing severe liquidity crises. The 2022 sell-off has been exacerbated by concerns about contagion threatening the stability of the entire crypto market. The 2018 sell-off was driven largely by panic selling and margin calls on retail investors’ positions. Still, several key differences exist between the 2018 Bitcoin sell-off and 2022’s crypto winter.
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