Week Ahead: Cryptocurrencies record first eight-week decline, analysts forecast the end of the bear market
BTC traded in a range from $28K to $30K, ETH touched below $2K briefly in a volatile week for crypto assets with some positive price action in the second half of the week before risk assets trended lower on Friday.
Some holders of cryptocurrencies have taken part in the sell-off with reports that whales are starting to increase buying activity. Heavy losses in global markets with recession fears have turned into a contrarian buy signal for some investors. Microstrategy CEO Michael Saylor reiterated BTC will go into the millions after strong industry consolidation. Saylor noted BTC has sold off along with other risk assets due to the Fed plan to keep hiking interest rates, but it’s separate from the stablecoin debacle that will accelerate regulation. Microstrategy CEO remarked regulation will be good for the industry.
Some technical analysts are forecasting the end of the current bear market after the first eight-week decline. The strongest BTC support level is around $28.5K, with resistance seen around the $31.5K level that could lead to a rally if breached. The US dollar had a negative week as other safe havens were more attractive for investors. Gold rose 2% as the USD and US bond yields softened as investor focus shifted from rate hikes to recession concerns.
Recession worries, lack of capitulation signals, and Fed rate hikes casted doubt on whether risk assets can rebound in the short term. Recession fears triggered a drop in US retailers, with the sector under pressure ahead of more earnings. The S&P 500 dipped into bear-market territory with a seventh straight weekly decline, the longest losing streak since the dot-com bubble burst. US stocks were dragged down by $550B lost in consumer stocks last week. Shanghai Covid news and China rate cuts have boosted optimism for this week, lifting risk appetite higher.
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