Investors are hoping that the worst of the crypto liquidity crisis is over. Therefore, the Bitcoin price experienced a minor relief this week. So, what levels are next? Here are the analysts’ comments…
Bitcoin rose 14% in a week
On Friday, Bitcoin rose 13.63 percent in the seven-day trading week that started on Sunday. It recorded its best week since October. The price rallied as high as $22,478.37 at one point. It hit a low of around $17,000 in June. Felix Hartmann, managing partner of Hartmann Capital, said, “From a volume perspective, many bankruptcies and forced liquidations have passed. “The Three Arrows’ filing for bankruptcy was kind of the ultimate in this regard,” he said.
Three Arrows, a crypto-focused hedge fund, had a hard time, as we reported on Kriptokoin.com. It filed for bankruptcy last week after suffering a liquidity crisis. Hartmann noted that the contagion of the market could spread to smaller crypto exchanges or funds. But he added that the larger, more effective platforms are not on the decline. He said that if the crypto industry can get through a month without bad news or bankruptcies, it is “very likely” that this market will double. Still, even as the market doubles, the Bitcoin price only rises to April levels.
There is a search for stability in the market
Titan’s lead crypto analyst Gritt Trakulhoon described Bitcoin’s weekly rally as a “much needed” short-term relief rally that followed a major capitulation that stretched back to May when Terra’s stablecoin project collapsed. Indeed, cryptocurrency prices had plummeted. This situation also forced liquidity. As a result, crypto lending platforms and other firms have also suffered.
Trakulhoon also said that some names, such as Sam Bankman-Fried, are providing loans to their ailing platforms. This week, the CEO of FTX said that he and his company still have “a few billions” on hand to support struggling firms that could further destabilize the digital asset industry. Trakulhoon said that between $22,500 and $23,000 is the resistance level to watch for Bitcoin. He added that if it rises above this threshold, it should rise “pretty fast” to its next stop: $28,000.
The analyst drew attention to this development
Fed officials said at the July meeting that another rate hike of 50 or 75 basis points was likely. Trakx economist Ryan Shea also drew attention to this news. Combined with growing signs that the US economy is slowing more significantly than policymakers had anticipated, it makes investors view the Fed’s aggressive stance as “more cautious”. Shea says, “Actually, they’re reviewing hikes. Instead, they focus on the prospect of eventual Fed capitulation, which is a positive scenario for crypto prices, and risk assets more generally.”
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