Crypto strategist warnings of bitcoin price collapse

According to one expert, the world’s most popular cryptocurrency could plummet as low as $ 13,000, or nearly 40% below current prices.

Back to $ 13,000

Ian Harnett, co-founder and chief investment officer of Absolute Strategy Research, told CNBC’s “Squawk Box Europe” Tuesday: “We would still be selling this type of cryptocurrency in this climate.”

Bitcoin could be about to decline further if previous cryptocurrency booms were any indication.

This is actually a cash game.

What we have found is that it is not a store of value, a commodity or even money.

Harnett explained his negative prediction by stating that previous cryptocurrency rallies have shown that bitcoin often falls by 80% from all-time highs.

According to Harnett, such a drop in 2022 “would set you back to around $ 13,000,” a “major support region” for the token. At the height of the 2021 cryptocurrency boom, Bitcoin hit a record high of around $ 69,000.

“The bitcoins of this world are doing well in a world where liquidity is abundant,” added Harnett. When that liquidity is removed, as central banks are currently doing, you may see those markets come under tremendous pressure.

Bitcoin investors are in big trouble

Last week, the Federal Reserve raised its benchmark lending rate by 75 basis points, the largest one-off increase since 1994.

The Bank of England and the Swiss National Bank therefore took similar actions in response to the Fed’s decision.

Before the Fed raised interest rates last week, the cryptocurrency market was already in trouble, with traders alarmed by the $ 60 billion collapses of the stablecoin terraUSD and its twin token luna.

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The decline in value of a derivative token intended to be redeemable one-to-one with ether has exacerbated the financial woes of major industry players, including Celsius and Three Arrows Capital.

The cryptocurrency market is strained as investors consider how rising interest rates would affect assets that grew at a time of low interest rates.

As a result, digital assets have suffered. In the previous two weeks, the total value of all cryptocurrencies dropped by more than $ 350 billion.

Tuesday’s price of $ 20,010 for one bitcoin was down 5% from the previous day. The major cryptocurrency has experienced a year-to-date loss in value of more than 50%.

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Steve Anderson
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