Will Bitcoin Drop again? Background
Bitcoin has risen nearly 20% since June 18th when it fell to its lowest level this year.
- Some analysts are arguing that given that nearly half of Bitcoin Holders are still in the money, the low of the year has not yet been reached.
- The economic fundamentals (Inflation primarily) have not changed yet
- There may be more companies and cryptocurrencies that could fail in the next few weeks and months (like Luna, Celsius, 3AG, Voyager, etc ), and the Federal reserve’s rate hikes have only begun and are nowhere near where the Fed wants them to be.
Will Bitcoin Drop again? Potential Risks
- European Economies: Almost every European economy is in trouble with rising fuel prices and a very real possibility of Russian Gas not being available during the winter. This will have serious consequences on the largest economy Germany and most of its trade partners in Europe. This will also have Global consequences given that Europe is a massive market for countries all over the world
- Recession in the US: While the latest employment stats were quite good, there is no guarantee that the Fed rate hikes plus the European crisis will not push the US also into a recession.
So while cryptocurrency-specific factors have improved significantly over the last few weeks, the macro factors have not improved significantly and there is a possibility of things getting even worse.