Can Crypto Markets Sustain Recent Rallies? Industry Experts Weigh In 

• The crypto markets performed impressively in Q1 as Bitcoin’s price rallied to over $28k.
• Analysts are divided on whether recent crypto market momentum can be maintained.
• Bitcoin’s tightly-ranging price has elicited a reaction from John Bollinger.

The crypto markets took a beating last year as the Fed’s efforts to curb inflation left investors risk-averse. However, the markets have shown signs of a recovery in Q1 2023, with most leading crypto assets printing double-digit percentage gains over the period as Bitcoin’s price surged by over 70% from about $16,547 to $28,478 per CoinMarketCap data.

Unsurprisingly, the market sentiment has been significantly bullish as a result. But industry experts are split on whether this momentum can be sustained throughout April. 

Strong Headwinds or a Run to $40K?

In a tweet on April 5, senior Bloomberg Intelligence analyst Mike McGlone claimed “it may be illogical” to expect recent crypto market rallies to continue. In what he described as a “liquidity rug-pull,” the analyst pointed out that U.S. dollar liquidity, which often fuels risk assets, is drying up.

McGlone argued that the first indication is that banking deposits are drying up due to recent banking failures. According to the analyst, deposits are reducing at rates last seen in 1959. He further suggested that central banks are likely to continue to raise rates. 

All these lead him to conclude that we could see crypto markets trend lower in the short term. However, not all agree with this view, especially Eight‘s Michael van de Poppe.

In a YouTube video released on April 4, van de Poppe argued that Bitcoin’s price would likely run up to $30k in the next few days and above $40k in the coming months. Unlike McGlone, the Eight Founder expects the U.S. Dollar to show weakness soon, predicting that the Fed will probably pause interest rate hikes.

What Do the Charts Say?

Prominent technical analyst “Duo Nine,” in a tweet on April 6, asserted that Bitcoin’s price, currently locked in an ascending wedge pattern, continues to face resistance at $28,550. 

He believes Bitcoin’s price could be heading lower, judging by the daily chart’s moving average convergence/divergence (MACD). However, Duo Nine notes that this could change if the market sees buying pressure from Binance’s industry recovery fund initiative.

John Bollinger, veteran trader and inventor of the Bollinger Bands, had his say, stressing that Bitcoin’s price is almost in a squeeze. Usually, this indicates that the market will see some price volatility soon. U.S. economic news like the Nonfarm Payroll (NFP) could easily trigger this volatility. 

With the data open to interpretation, experts are conflicted about the market’s direction. But central to all highlighted views is the Fed’s monetary policy and whether it would continue to raise interest rates.

On the Flipside

• At the time of writing, the CME Group FedWatch Tool indicated a 58.2% chance that the Fed would pause interest rate hikes.
• Glassnode data shows that Bitcoin whales with holdings greater than 10,000 BTC are selling.

Why You Should Care

After price rallies, it is not uncommon to see subsequent price corrections. Staying abreast of expert opinions can better inform investment decisions.

Want to know more about the recent rallies in the crypto markets? Read this article:
Bitcoin Breaks $28K as Ethereum Eyes $2K Amid Banking Crisis

Interested in the recent Euler Finance hack? Check out this article:
Euler’s $200M Hacker Finally Returns All “Recoverable Funds”