Will Bitcoin Recover?

All cryptocurrencies have been trading in the red due to a market-wide downturn caused by macroeconomic factors and an unexpected spike in the interest rates after growing inflation. While Bitcoin has jumped above $20,000 levels after correcting to $17,600, many analysts still fear that the downward trend may continue. 

Will Bitcoin recover? This article will provide an overview of the current BTC market and review analysts’ predictions for a potential Bitcoin price recovery in the coming months. 

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

BTC price jumps to $20,000 after $17,600 bottom

After trading at an all-time high (ATH) of $69,000 in November 2021, Bitcoin plunged below the $20,000 mark in June 2022. In the month of June, BTC fell by over 40%, falling from $31,000 to $17,600. 

While price volatility in the crypto markets is expected, Bitcoin fell below the $20,000 mark for the first time since December 2020. The widespread market correction can be attributed to increasing pressure from macroeconomic forces following a spike in the U.S interest rates. 

Will Bitcoin Recover?

The U.S Consumer Price Index (CPI) report for May stated an 8.6% inflation growth on a Year-on-Year (YoY) basis. Cryptocurrencies and other asset classes, including the shares market, faced severe selling pressure. 

Furthermore, this massive selling pressure triggered massive layoffs among notable crypto firms. Coinbase exchange stated it would cut 18% of full-time jobs, while BlockFi has also decided to lay off a fifth of its staff. 

However, the $17,600 has acted as a temporary bottom for the largest cryptocurrency in the world. Bitcoin jumped by 10% on Monday, 20th June, after the massive weekend sell-off. Currently, the token trades at $20,800 with a market cap of $394 billion. 

Will Bitcoin Recover? 

Despite a 10% single-day jump in BTC’s price, some market analysts are not confident that the token can hold above $20,000. 

“The odds are this is a dead cat bounce”, said Vijay Ayyar, VP of corporate development and international at crypto exchange Luno. “We’re oversold, so a bounce is expected”, he further mentioned whilst talking to CNBC. According to him, Bitcoin will have to close above $23,000 in a single-day timeframe to regain some confidence among investors in the short term. 

On the other hand, some experts feel that a crypto market bottom could be close. Giles Keating, director of Bitcoin Suisse, told CNBC that “we’re close to a point where some of the real excess leverage has now been driven out of the system and a bottom can begin to be formed”. 

While Keating believes there may still be an additional risk of liquidation, most of the sell-off may be over. 

Should you buy Bitcoin? 

According to Wallet Investor (WI), a price forecasting algorithm, BTC might experience further volatility in the short term. The price forecaster predicts a potential low of $17,100 for BTC by the end of June 2022. 

However, the long-term view of Bitcoin is fairly optimistic. WI predicts a 12-month price forecast of $37,000 for BTC. That is nearly a 90% price increase from current levels. 

Users looking to buy Bitcoin may prefer conducting their own due diligence and research before investing. While investing in cryptocurrencies may be preferable to invest only what one can afford to lose. 

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Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.