Vetle Lunde, a cryptocurrency market analyst at K33 Research, believes there are parallels between Bitcoin’s recent surge from its 2022 slump and its price pattern over the course of 2018-2019.
In an interview with CoinDesk TV’s “First Mover” show on Monday, Lunde said, “The current stage of decline and recovery is very similar to the stage of 2019, both in duration and price movement.” .
In a research note to clients last week, Lunde wrote that Bitcoin could reach $45,000. BTC is currently trading at around $29,440, up around 80% in 2023 and up around 80% in 2023. The rebound follows a troubled year when several major companies declared bankruptcy and risk-afraid investors fled the cryptocurrency market.
“Throughout the second half of 2022, we have seen a lot of forced selling and selling from cautious investors,” Lunde said. “This has made people underexposed. It also attracts a lot of people to short (crypto) being conservative by adding exposure. It creates this dynamic of feeding the squeeze and rising.”
He added that the negative-to-neutral sales of derivatives is a further sign of investor caution despite recent price increases. This sentiment may change, although relatively low market liquidity may affect pricing going forward.
Runde believes inflation data has been mildly stimulating last week, with faint signs that the US central bank will scale back its hawkish monetary policy, which could boost market sentiment. increase.
He blamed last year’s crash in cryptocurrency prices, in part, on companies exposing themselves too much when interest rates were zero.
“It was a lot of spending and a lot of focus on growth,” said Lunde. “So there was an environment where miners got a lot of fiat holding a lot of bitcoin and then all the crypto banks started neglecting due diligence, plus they were exposed to price declines. ”
But the 2022 industry-wide crisis, which saw several major players declare bankruptcy, including crypto hedge fund Three Arrows Capital, has already benefited the market by weeding out the bad guys, Lunde said. suggested. “Many of these rotten fruits have been washed off the market,” he said. So the market as a whole is now at a more stable stage and can handle higher interest rates for longer.”
He added: Unfortunately, we will no doubt face similar crises in the future. For now, however, such risks seem to have disappeared from the market. So the market feels safer at the moment.
