At the moment, there are simply no reasons for a u-turn in the cryptocurrency market because the global picture hasn’t changed in any way: the challenging macroeconomic situation combined with tightening monetary policy is contributing to more expensive lending for speculative operations.
On top of that, a mortgage crisis looms ahead, and the state of European banks isn’t perfect. Given this environment, no one will be toying with risky instruments, and if the situation worsens, their positions will be the first to be cut: cryptocurrencies, and stocks, among others. U.S. indexes are falling, and so is the cryptocurrency market: S&P 500 has lost over 10% since mid-September.
We should expect a further drop in Bitcoin, which can easily go down to $15,000 in the coming weeks and hit $10,000 in the foreseeable future. Those who doubt such a possibility should look at the BTC chart of 2018 — that’s the last time when the Fed and the ECB sought to tighten monetary policy and cancel the quantitative easing (QE) policy. In short, BTC plummeted 60% from its peak to ~$6,000 and then collapsed to $3,000 after a period of brief consolidation.
There’s no need to try and outplay the Fed and act contrary to market logic. Of course, you can cautiously buy BTC and ETH — the only assets that are actually able to survive the crypto winter with the highest probability and recover after another drawdown. However, the best tactic is to wait for any hints that the big central banks will be changing their strategies.
