Bitcoin is making a comeback, but the risk of more ‘sharp pullbacks’ is real
Bitcoin may extend its rebound but is unlikely to break above US$100,000 before the end of the year, as rising interest rates and the Iran conflict continue to weigh on crypto assets, according to analysts. The crypto asset class is likely to end the year higher than it is today, but below the peak reached last October, according to Alice Liu, head of research at crypto data platform…
Bitcoin shows signs of recovery, but analysts warn of possible sharp declines ahead. According to Alice Liu, CoinMarketCap's head of research, the digital currency is expected to end the year above its current level but still below its October peak of $126,000. Liu describes the recovery as "cautiously positive," noting that Bitcoin is the main driver behind the ongoing crypto rebound.
After experiencing a steep decline following a record high last October, Bitcoin briefly traded between $70,000 and $85,000 this summer, reigniting hopes for a bull market. However, it has since hovered around $85,000 without making significant gains.
Macroeconomic factors, such as rising interest rates and geopolitical tensions, are currently hindering investors' interest in cryptocurrencies. The 10-year US Treasury yield recently reached a 24-year high of 5.36%, making crypto assets less attractive compared to lower-risk investments like Treasuries. Angela Ang, APAC managing director at BitGo, emphasizes that the cost of capital is the primary constraint for crypto investors at the moment.
The Federal Reserve's interest rate decision in late October could significantly impact Bitcoin's price, with a pause in rate hikes potentially sparking a bull market, while another increase might push the token back to around $75,000.
Analysts predict Bitcoin's price to range between $75,000 and $95,000 for the rest of the year, with a potential finish between $85,000 and $92,000. However, CoinMarketCap's Liu anticipates a more volatile range, projecting Bitcoin to fluctuate between $75,000 and $95,000 and eventually settle between $85,000 and $92,000, punctuated by sharp pullbacks.
Digital asset trading firm QCP Capital expects Bitcoin to trade between $80,000 and $90,000 during the fourth quarter, but warns of a potential drop below $70,000 if tensions in the Middle East escalate and drive up oil prices. The relationship between Bitcoin and oil prices appears inversely correlated, with de-escalation headlines driving crypto prices up and escalation headlines pushing them down.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
