Bitcoin price stabilizes at $20,000, but recession fears could trigger another sell-off
Economists expect many major countries to face a recession by 2023, potentially causing the crypto economy to slide as well.
- Bitcoin’s (BTC) 12-month losses hover around -41%.
- BTC could witness a relief rally of 30–40% if it breaks its $21,600 resistance cleanly.
- CNBC’s Jim Cramer referred to Bitcoin as worthless once again, claiming that more crashes are imminent in the digital currency’s future.
Bitcoin has stayed range-bound between $19,500 and $20,500 over the last seven days. The digital currency is currently down -30% for the month while trading at $19,968.
On July 5, Bitcoin experienced an intraday swing of approximately -8% before recovering almost in full. This volatility comes amid rising concerns of a looming recession hitting the American economy in the near term.
Brokerage firm Nomura’s chief economist Rob Subbaraman expects a recession to also plague many countries within Europe, as well as the UK, Japan, South Korea, Australia and Canada by next year. Subbaraman added:
“Right now, many central banks have shifted to a single mandate — that’s to get inflation down. So they’re going to be very aggressive and that means front-loading rate hikes. We have been pointing out for several months the risks of a recession, and we’ve bitten the bullet. And now we have many of the developed economies actually falling into recession.”
Crypto expert Michaël van de Poppe noted that for Bitcoin to surge, it needs to crack the all-important $19,700 resistance cleanly. If this is the case, he sees a target of $20,300 in play. “I’m expecting Bitcoin to consolidate for a bit here, but breaking the next resistance zone is a trigger for continuation toward $23,000 and a summer relief rally,” he pointed out.
Some analysts believe that whales have pumped Bitcoin’s value “falsely” over the last couple of weeks and a possible pullback to $15,800–$16,200 could happen.
Lastly, technical traders see a 30–40% relief rally on the horizon if BTC reclaims the $21,600 resistance.
Mainstream media bashes crypto
Amid growing volatility and falling prices, many mainstream pundits have once again claimed that “crypto has no real value” and that the space will die slowly. CNBC’s Jim Cramer sees the market eroding further, going as far as saying:
“Crypto really does seem to be imploding. Went from $3 trillion to $1 trillion. Why should it stop at $1 trillion? There’s no real value there. What an awful asset. NFTs sold to you. Made up.”
Cramer’s insights regarding the crypto market have been hilariously wrong since 2020. For example, in August 2021, he recommended buying Coinbase stock COIN when it was trading at $248, calling it a steal. At press time, COIN is trading at $54.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.