This week, Bitcoin (BTC) is bouncing back as a surprise rally threatens weekly highs.
BTC/USD is back at weekly highs on May 30, adding several percent overnight, which should give bulls some much-needed confidence.
Unlike recent weekly closures, the May 29 candle managed to restrict the loss and instantly reverse course as the new week began.
Nonetheless, Bitcoin has now closed nine consecutive red weekly candles, which has happened first time in its history.
Let’s hear from the industry leader how bearish it will be in June?
The macroeconomic backdrop is still unsettled, retail interest is waning, and calls for a deeper concession are still being made.
Alex Mashinsky, CEO of Celsius Network, discussed the current cryptocurrency crisis, LUNA/UST, stable coins, and inflation with David Lin, Anchor and Producer of Kitco News.
Alex, in response to David’s question about the most talked-about topic of the crypto sell-off, stated that eight red weekly candles are unquestionably a new record. As a result, there’s so much concern that even JP Morgan, which doesn’t generally comment about crypto, released a report this week claiming that the crypto sell-off may have been overblown and that markets will rebound to the $38000 level.
He continued, “We’ve seen green candles on Wall Street in the last two days, but crypto is still on red,” which he explained by the fact that there is 1.8 billion dollars worth of expirations today, so there’s a chance of a reversal over the weekend and into next week.”
He referenced several of his colleagues, such as Scott Minard, CIO of Guggenheim, who said, “There is always room for downside when you break below 30000 regularly, 8000 is the ultimate bottom, especially with the Fed being tight.”
Furthermore, Ray Dalio stated the exact opposite of Scott, saying, “You need to allocate to crypto, you need to allocate to this digital gold,” which is more convincing in such a volatile market.
Inflation is not a long-term concern!
Impending inflation data will have an impact on the bitcoin market. Mashinsky believes the Federal Reserve will do everything necessary to keep inflation under control, putting riskier assets like cryptocurrencies in danger.
According to Alex, “the bitcoin market runs on its own and has its own drivers, and all of these things are connected, so the bitcoin or crypto market is watching the stock market, the stock market is watching the fed, and the fed is watching inflation, so the fed has been sitting on the pandora box for the last 20 or 30 years, making sure that the box doesn’t open and the three-headed monster, the dragon of inflation, escapes the pandora box, but it has now escaped the fed and spewing fire in every market and the fed needs to slay the dragon right now”.
So the big question is: whether the Fed will stick to its declared plan and raise interest rates to 3-5 percent or higher in order to combat inflation that only time will tell. According to news reports, it is possible that they will “normalize” their monetary policy once the market is back in shape.
Bitcoin could hit a six-figure price in 2022
Mashinsky said that the flagship cryptocurrency and gold may have a significant increase next year.
In addition, he stated that as the money supply expands and fiat currency debasement accelerates, fiscal and monetary policies in the United States will boost Bitcoin (BTC) and gold in 2022.
They [the US Treasury and the Federal Reserve Bank] will continue to reflate, and as a result, Bitcoin and gold will rip much higher sooner or later, because people will comprehend that they are being taxed and subsequently debased.”
This is where Bitcoin could hit a six-figure price in 2022. He further elaborated.
“I expect Bitcoin to blow higher again next year, from $140,000 to $160,000.” When people realize that they are the genuine only two assets that are not linked to the mother ship, the dollar, I predict gold to move much higher than $2,000 and stay above those levels.”
However, due to the Federal Reserve Bank’s efforts to combat inflation and reduce asset purchases, bitcoin and gold may fall first before recovering.