Bitcoin, which has been moving in a stagnant cycle for a long time, provided a 12% return to its investors in June.
While investors wonder if the upward trend will continue, experts have warned about the challenges ahead in the cryptocurrency market.
According to Coin Metrics data, Bitcoin surpassed $30,000 on Wednesday, reaching its highest level since April 14. On Friday, Bitcoin tested the level of $31,430, marking the highest level of 2023.
Although the leading cryptocurrency started the week with a slight decline due to negative news flow and profit-taking from the high prices seen last week, it remained above the critical threshold of $30,000.
Why did Bitcoin rise?
The surge last week happened after the asset management giant BlackRock filed for a Bitcoin exchange-traded fund (ETF).
At the beginning of this week, there was a partial retreat due to concerns following the rebellion of the Russian private military company Wagner against Putin. However, Bitcoin maintained its trajectory above $30,000.
The pressure created by monetary tightening cycles on global growth expectations and concerns about major economies contributed to the negative sentiment. Additionally, the possibility of the US Federal Reserve continuing with interest rate hikes continued to put downward pressure on risky assets.
Despite all these negative factors, Bitcoin staying above the $30,000 threshold gave hope to investors.
The influence of a stagnant market depth and significant purchases by whales also played a determining role in price movements.
Jamie Sly, the head of research at CCData, stated in an email to CNBC, “Bitcoin’s recent price increase is largely due to large transactions in the shallow market.”
Current State Of The Crypto Market
Bitcoin started the new week with slight retracements, showing a 1.5% decline and moving around $30,200 in the morning hours. Ethereum found buyers at around $1,890, experiencing a 2% loss.
Ripple experienced a 2.66% decline, trading at $0.48, while Cardano saw a 4% drop, trading at $0.28. Dogecoin also saw a 2.7% decrease, trading at $0.065, and Solana experienced a 2% decline, trading at $16.8.
Will the increase continue? While the positive sentiment persists in Bitcoin and other crypto assets, experts have issued warnings about the risks.
Carol Alexander, a finance professor at the University of Sussex, stated in an interview with CNBC that there is a high probability of Bitcoin trading in the range of $25,000 to $30,000 for the rest of the summer. However, Alexander also mentioned the possibility of Bitcoin climbing to $50,000 towards the end of the year due to larger market players’ efforts to support the market with significant purchases. She also cautioned that the crypto market is not a reliable market for ordinary customers.
Mike McGlone, a senior strategist at Bloomberg, highlighted significant obstacles for Bitcoin to reach the $40,000 level. In his comments on Twitter, McGlone mentioned that BlackRock’s move would not shield Bitcoin from a potential US recession, a potential bear market in stocks, or the stern stance of central banks.