The crypto market is showing sluggish movement due to unfavorable macroeconomic conditions. Bitcoin, the largest cryptocurrency, in particular, is exhibiting extremely sluggish price movement. It is stuck in the $19K-$20K range for quite a while. It is currently trading at $19,082 and has fallen close to 0.5% in the last 24 hours. Florian Grummes, the managing director at Midas Touch Consulting, reveals how Bitcoin can break out of this range.
According to Grummes, Bitcoin will break the support level at $18K and test the price level at $10K. He also considers Bitcoin testing $6K a worst-case possibility. According to Grummes, the crypto market is currently in a liquidity crisis.
However, according to him, once Bitcoin reaches the bottom, it will reach a new all-time high.
Grummes correctly predicted the 2022 financial liquidity crisis due to unfavorable macroeconomics. He also correctly predicted that Gold will outperform crypto and the stock market in the crisis.
Bitcoin Break Out Movement Explained
The current global financial instability is tanking Bitcoin’s growth. The Fed is engaging in quantitative tightening to curb inflation levels. Therefore, the crypto market is going through a crypto winter. Grummes believes that the US Dollar will be the best investment bet during this crisis.
Grummes highlights that a crypto winter typically lasts for about 24 to 27 months. Since this crypto market is still one year into the winter, Grummes believes that a legitimate bull market is still about a year away. He still expects that the testing of the $6k price level is the worst-case-scenario. He believes that a bull market can be expected around the next Bitcoin halving in May of 2024.
Will Regulation Help Bitcoin
Many experts believe that regulatory clarity will help Bitcoin and Ethereum. It will increase institutional investment in cryptocurrencies. However, Grummes believes that central governments do not want to see Bitcoin succeed. He believes that the government will push Central Bank Digital Currencies at the expense of Bitcoin. Therefore, regulations may also hamper the growth of Bitcoin.
