Bitcoin slowed on its bullish momentum after breaking the barrier at $22,000 and $23,000. The cryptocurrency still holds some of its gains from last week, but could be ready for a retest of lower levels.
At the time of writing, the price of BTC is trading at $22,900 with a loss of 2% in the last 24 hours and a profit of 8% in the last week.
This Bitcoin Bear Market Might Not Look Like 2020
Crypto market participants appear to be continuing a rapid and persistent uptrend, like the one seen in 2020. At that time, the price of BTC dropped to a low of $3,000 and then began an ascent towards its highs. current histories.
However, the trading company QCP Capital believes the price of Bitcoin and other major cryptocurrencies could see more sideways movement and downward pressure before reclaiming lost territory. This price action may look more like the bear market of 2018.
The company believes that the price of BTC will benefit during the third quarter of 2022. During this period, the cryptocurrency could attempt to recover higher levels, but with the potential to break through critical resistance areas capped by pressure. increased sell-off from Bitcoin mining and crypto companies suffering from the downtrend.
BTC’s price action may continue to operate in uncertain terrain with “jerky moves” with an alternate narrative between bullish and bearish with critical resistance at $28,700 on the upside and critical support at $10,000 on the decrease.
The latter corresponds to the 85% crash that the price of BTC experienced during the bear market of 2018.
Crypto Recovery Will Be Slow But Lead To Long-Term Upside
In 2017, when Bitcoin price hit its previous all-time high at $20,000, the crypto market followed with a massive rally. In 2018, the sector entered a multi-year bear market, with the price of major cryptocurrencies losing over 80% of their value, leading to lower trading liquidity with it.
QCP Capital believes that the sector has entered a new era of more maturity and resilience. The current downward selling pressure has resulted in high liquidity in a robust environment with less volatility on major cryptocurrencies.
Additionally, institutional interest in Bitcoin and Ethereum has been persistent despite falling prices. In fact, QCP records an increase “in both trade and investment” from these entities.
In the long term, this resilience in the face of high inflation and a hawkish Federal Reserve will result in a massive rally. The trading company compared the potential growth of the crypto ecosystem, for the decentralized finance sector, with the Nasdaq 100.
As seen below, the crypto sector tracked the early years of the index and may trend lower over the next few years before it finally achieves global adoption. Over the next decade, this suggests:
(…) that the future will be dominated by cryptography. In the same way that every business in the world today is, to some degree, an internet business. We believe that in 5-10 years, every business will be, in some way, a crypto business.