If the upcoming winter proves to be a major test for Europe, Bitcoin (BTC) could see another 50% dive from current levels.
This was the conclusion of a veteran crypto market analyst this week, with BTC/USD failing to reclaim the $20,000 support.
In an interview with Cointelegraph, Filbfilb, the creator of trading suite Decenttrader, predicted a potential BTC price drop to as low as $10,000 in 2022.
As the European energy crisis intensifies, riskier assets face a major test, they believe, and the extent to which crypto suffers depends largely on whether How diplomacy can win avert a major emergency in 2023.
The figures are not just pies in the sky; At the height of the bear market of the last halving cycle in 2018, Filbfilb perfectly timed the market bottom as BTC/USD plunged into the $3,100 floor.
Cointelegraph contacted Cointelegraph for more details on how the coming cold weather could affect the already fragile bitcoin trading environment.
Cointelegraph (CT): You pretty much capitalized on the low of $3,100 in the last cycle. Is there a possibility of another leg down and what price do you think is appropriate as a bottom this time?
Filmfilb (FF)As it stands, the price of bitcoin is heavily correlated to “legacy” markets, particularly the NASDAQ, which we know is under enormous pressure due to the Federal Reserve’s monetary policy. So this time “it’s a little different” because of the high correlation and external economic forces.
Last time, it was very easy due to volumes at the $3,100 low and an 85% correction. This time around, the volume base is around $11,000; There is no more time-based history of $20,000-$10,000.
Much depends on the winter and the dynamic of how Europe deals with the winter; I expect poor winter dynamics to result in a test of the previous volume range highs of $10,000-$11,000. With what happens next, talks between NATO and Russia seem inevitable; The sooner that happens, the less it is for bitcoin.
CT: How is the current cycle different from the previous bear market? Is the macro playing a huge role in this cycle?
marginal force: As noted above, the relationship with “legacy” is paramount; Bitcoin does not exist in a harsh inflation-pushing economy and is behaving as an asset at risk rather than an inflation hedge. So this time it is somewhat different. However, we are improving within the normal time frame and the normal percentage turns back to normal where we are. So it’s “similar, similar but different” for now.
CT: You said recently that “the Q1 rally seems really clear.” What makes you so sure?
marginal force: two reasons:
First, if you use the starting point of the bitcoin cycle as the actual supply-supply-emission date, bitcoin usually exits the bear market after 1,000 days, which would be Q1, followed by the new narrative. begins.
second, we will overcome the winter; From a game theoretical standpoint, it seems that if things are bad, but as Europe navigates the winter financially, things will look very positive for most of the next year, whereas if things are bad, it should be communicated. Chances increase, which I mentioned will bring stability in the short term. This could be positive thinking so I would give this scenario a 2/3 chance.
CT: What are your thoughts on Ethereum? Switching to proof-of-stake? Does it boost its value proposition over the long term?
marginal force: Tough question; Only time will tell, but the coins should be the catalyst for the lower emissivity value.
CT: Are you bullish on ETH/BTC (and altcoins)? Sickness Coming in about two weeks? Or will it be a news-sales event?
marginal force: I am generally bullish on ETH. This is effectively the same as a halt effect. History tells us that we tend to rally in these types of events and then dump shortly after, but the overall direction will be up.
I’m brought up on this idea, but the big elephant in the room is the CPI data which drops at about the same time. Much will rest on that; Positive CPI data and a news sell event means that BTC may outperform in the near term, but in the next cycle, the case for ETH is very strong if all goes well.
CT: Were you surprised? 3AC collapse, Is the systemic risk still here?
marginal force: I was surprised that the funding providers didn’t do their due diligence on the arrangement beyond speculation. However, running a business in a location that has grown rapidly results in corner cuts, so it’s not surprising.
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Innocence is probably the way to look at it; Everyone believed their own hype and overlooked the risk. This is an embarrassment to the finance professionals who should have taken the risk earlier on growth. We know volatility in crypto; Ignoring it is amateurish at best, careless at worst – given the values involved, it’s probably the latter.
CT: Will it be September when the Fed is supposed to extract more dollar liquidity through quantitative tightening (QT)?
marginal force: Yes, I think they will show that the Fed has the power and they will raise rates on good or bad news. The good news gives them the opportunity to do so; Bad news means they are needed.
CT: Will this negatively affect the BTC price coming in 2023?
marginal force: Depends on winter in the EU. Everyone forgets about the relationship between the EU and the US – if the EU gets a setback, the US will suffer; Imports will be costly and demand will be affected.
Let’s see how winter goes.
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