Why could the free fall of cryptocurrencies continue?

The crypto sector has been going through some brutal months for a short while now. While the price of cryptocurrencies has seen an unparalleled drop, the trend shows no signs of improving. Starting at $45,000 in early April, bitcoin went through several stages before trading at $19,000. While crypto investors hope for an early rise, Deutsche Bank strategists believe the decline could continue.

The downward trend is not over yet

The cryptocurrency crisis is worrying crypto investors. Since the onset of the bearish formations, the price of the various crypto assets has been falling constantly. Bitcoin, which traded at nearly $70,000 late last year, gradually declined until it reached $19,000 today. According to a recent report from strategists at Deutsche Bank, the difficult times in the sector do not appear to be coming to an end anytime soon.

For Marion Labore and Galina Pozdnyakova, the downward trend could continue due to the complexity of the system. For the duo, the much-discussed Celsius disaster and the collapse of the Terra ecosystem are making it difficult to stabilize token prices. Why ? Because due to the segmentation of the cryptocurrency market, there are no common valuation models unlike the public stock system.

Macroeconomic conditions also do not favor crypto assets. The opinion of the experts at the German bank does not go unnoticed as Michael Burry shares the same concerns. Indeed, the hedge fund manager made famous by the movie The big short thinks the stock market and crypto are in the midst of a massive correction. The current trend may therefore continue for some time to come.

Bitcoin could return to $28,000 by the end of the year

The bearish trend of crypto assets is strongly impacting bitcoin. At a time when people are starting to lose hope, all eyes are on the queen of cryptocurrencies. Indeed, a rise in the price of bitcoin (BTC) could lead to a rise in the prices of other assets. Regardless of the type of investors, individuals or companies, a recovery can only be beneficial.

The German bank strikes a kind of crushing blow on the hopes that some negotiators cherish. While these strategists believe the markets may continue to slide, they also note that the S&P 500 moving along with the crypto could be an advantage.

According to the bank, the S&P 500 could return to its January level. As a result, bitcoin’s close ties to traditional financial systems could trigger a nearly 31% rally from current prices. So there is a high probability that the bitcoin price will reach $28,000 in December.

The German bank thinks the fall of cryptocurrencies can continue. It’s not the only one, though, as many investors have argued that the current correction must continue before hoping for a recovery. Despite everything, strategists still believe that bitcoin could hit $28,000 in December. Even if we are still a long way from the November 2021 price, it would be much better than current prices.

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Eddy Senga avatar

Eddy Senga

The world is changing and adaptation is the best weapon for survival in this undulating universe. As a crypto community manager at the grassroots, I am interested in everything directly or indirectly related to the blockchain and its derivatives. To share my experience and make known a field that fascinates me, there is nothing better than writing informative and relaxed articles at the same time.

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