Viewpoint: How to view the prospect of the cryptocurrency market?

Viewpoint: Cryptocurrency Market Outlook

Encryption researcher Fabian D. analyzes the impact of economic recession on the cryptocurrency market and proposes countermeasures. He believes that cryptocurrency may continue to be weak in the remaining time of the second quarter, but will rebound in the third quarter and outperform stocks from the fourth quarter to the first quarter.

I expect cryptocurrencies to remain weak in the remaining time of the second quarter, and we will trade within the volatility range. There will also be more negative impacts in the short term, as regulatory pressures and government/Gox increase the selling pressure of BTC. But as fear is removed from the market, I don’t think it will be as low as most people think (I plan to deploy heavily around BTC 24K and ETH 1.6K). This may also leave room for more PVP rotation, as we have seen recently in some areas, but a safer approach is to buy at a good price and use idle assets for liquidity mining.

If the recession has not yet approached in the third quarter, there will be a window for rebounding from the low point as the election heats up. EIP-4844 will bring a local top to the ETH/BTC ratio, and halving is imminent. With the arrival of the economic recession, there may be another major safe-haven event from the fourth quarter to the first quarter. I believe that as the Fed turns to save the economy, cryptocurrencies will lead stocks in the recovery because cryptocurrencies are more sensitive to liquidity, and stocks are more affected by economic growth prospects.

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For this reason, I think we are unlikely to see BTC below ~21k and ETH below ~1.4k again, even in the case of an economic collapse, especially considering BTC’s performance in the banking crisis earlier this year. This will pave the way for a new cycle in mid-2024, with all negative factors in the past and many positive catalysts to come (halving, election, regulatory clarity, SEA and UK involvement, new use cases, etc.).

Reference: https://twitter.com/_FabianHD/status/1667635648952426496

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