Analysts assessed the state of the crypto market

The Bitcoin (BTC) exchange rate exceeded $28,000 and reached its maximum since June 11, 2022. According to CoinGecko, on the evening of March 19, the cost of the first cryptocurrency reached $28,509. On March 21, the asset is trading at $28.1 thousand,

Interviewed RBC Crypto experts commented on the current state of the crypto market and assessed its future prospects.

“The probability of a local “alt season” is increasing

Exmo.me CEO Vladimir Cherpichnikov

Unexpectedly for many, the crypto market turned out to be a lifeline from the consequences of the banking crisis. Initially, the price growth was driven by the bankruptcy of Sillion Valley Bank (SVB), in which the USD Coin (USDC) stablecoin issuer, Circle, kept part of its collateral (worth $3.3 billion). Some stablecoins came under pressure and temporarily lost their peg to the US dollar, and the most competent decision for traders was to transfer capital into bitcoin and other cryptocurrencies.

This situation created a driver to stop the correction. After that, positive data on inflation in the US came out (the figure fell to 6% on an annualized basis, as analysts expected).

At the same time, the banking sector, not only in the US, but also in the Eurozone, found itself in an even more difficult position. This, in turn, led market participants to believe that the Fed and other central banks will slow down their pace in raising interest rates. Some analysts even admit that rates will be lowered this year.

Also, do not forget about the decentralization and security of Bitcoin and many other altcoins. This increases investor confidence in cryptocurrencies and motivates them to invest in this industry for the long term.

BTC’s steady rise after $25,000 was largely the result of the liquidation of short positions. The $28,000-30,000 zone acts as local resistance, which is why a small price rollback is likely. The market will have more confidence in this if we see three or four days in a row with price jumps up and a price slowdown in the above-described zone.

On Wednesday (March 22) the next meeting of the Fed will take place, which will add volatility to the market. There is a 75% chance that the regulator will raise the rate by 0.25 percentage points. Much more important will be the forecast from the Fed on further monetary policy. If March becomes the last month of a rate hike this year, markets will take such statements positively.

Altcoins can only benefit from the BTC slowdown. As you can see on the charts, Polkadot (DOT), Cardano (ADA), Tezos (XTZ), Litecoin (LTC) and other coins did not show such growth. For this reason, altcoins may start to catch up with bitcoin in the short term. The probability of a local “alt season” is increasing.

Altcoin season, Altseason – a slang term for cryptocurrency traders, meaning a period of active one-time growth of alternative cryptocurrencies. It is believed that the “altcoin season” takes place in four phases: the rise of Bitcoin, the rise of Ethereum, the rise of large-cap cryptocurrencies and the massive growth of the rest of the crypto market, including low-liquid assets without fundamental value, accompanied by a massive hype from retail traders.

“Dozens and even hundreds of percent”

Head of the Cryptorg trading platform Andrey Podolyan

Bitcoin is aiming to close the $29,025 gap on the CME exchange that was formed back in June 2022.

Gap on the CME exchange is the difference in price between CME futures closing on Friday evening and reopening on Sunday evening. The CME exchange is closed for the weekend. Due to the fact that bitcoin is trading around the clock, most often there is a deviation between the closing price of the CME and the price up to which bitcoin traded on crypto exchanges by the time the CME reopened on Sunday evening. As a result, a price gap (gap) remains, and most often prices return to the level before the gap.

Mass panic in the US banking sector provoked, among other things, a short-term collapse in prices on the crypto market, and it was at this time that large players began to “buy the fall”. In addition, I believe that some money from the traditional financial sector has also moved into cryptocurrencies.

The short-term and medium-term forecast is as follows: bitcoin reaches the $30-32 thousand zone, followed by a period of calm (flat) at this level. At this time, the “alt season” should begin, in which other cryptocurrencies can give tens and even hundreds of percent of profit.

“Medium-term trend continues”

Cryptocurrency Market Analyst Viktor Pershikov

At the moment, the Fed meeting, which will be held this week, is the main driver in the cryptocurrency market. As a result of the meeting, market participants expect that monetary policy will be put under review due to the difficulties of the US banking sector and a steady decline in inflation.

Markets are laying the beginning of a cycle of rate cuts already this year, which, against the backdrop of infusions of money into the banking system, can improve the situation with liquidity and lead to an increase in prices for bitcoin and other market assets. The monetary tightening factor has weighed heavily on the cryptocurrency since the end of 2021, and a reversal in monetary policy could play into the hands of investors in light of the rise in BTC prices.

I believe that at this week’s meeting, the probability of a 0.25 p.p. is saved. At the moment, this can cause a surge in volatility in cryptocurrencies and lead to a local price correction, however, in general, the medium-term upward trend in prices for cryptoassets, which began in January, continues. The next target for BTC growth is $33,000, while ETH may reach $2,000 by the end of March.