Bitcoin trader says he expects more cuts, downsides and then sideways price action for BTC this summer

Discussions about the state of the crypto market have been a dominating headline over the past few weeks, as non-crypto local media has denounced Bitcoin (BTC) and DeFi investors for investing in assets with no underlying value. At the same time, crypto-savvy analysts and traders are raining down on the charts looking for clues that indicate when the market will bottom and when to reverse course.

Novice investors are clearly nervous, and a few have predicted the collapse of the burgeoning asset class, but for those around for multiple cycles, this new bear market is another wildfire that will eventually lead to a healthier ecosystem.

The next steps for the crypto market were a topic that was discussed in depth with Cointelegraph contributor Crypto Jebb and independent market analyst Scott Melker. The pair chatted about their views on why the value proposition for Bitcoin remains strong and what price action could look forward to for the top cryptocurrency.

Here’s a look at some of the key points discussed by Crypto Jebb and Melker.

Bitcoin is used as originally designed

Traders focus primarily on the spot price of Bitcoin, and many complain that it does not perform as inflation protection as promised, but Melker pointed out that its performance largely depends on the country and the economic situation in which the individual lives.

Bitcoin may have dropped significantly in terms of the US dollar, but compared to countries like hyperinflationary Venezuela or Nigeria with a large unbanked population, BTC offered people a way to keep the value of their money and get it transacted in one transaction. open financial system.

One of the major functions Melker highlighted is that Bitcoin is the first real asset to give people around the world the ability to exit the current financial system if it doesn’t work for them.

According to Crypto Jebb, Bitcoin has been described as being thermodynamically sound, that is, the asset that holds the energy put into the system, and it does not “seal” it with things like inflation.

Which direction will the market go?

Regarding the future of the market, Melker said, while crypto adoption doesn’t seem to be moving fast for those who’ve been on the market for years, “Bitcoin adoption is faster than the internet. It’s a hockey stick curve that’s definitely parabolic.”

Both Crypto Jebb and Melker have suggested that the paradigm shift towards investing in cryptocurrencies needs more time because people conditioned to invest in things like a 401k or Roth IRA and most investors are trained to fear risk.

In response to potential critics to point to Bitcoin’s volatility as the root cause of avoiding cryptocurrencies, Melker highlighted the recent struggles the stock markets have had, citing the poor performance of stocks such as Netflix, Facebook, PayPal and Cathie Woods’ ARK funds.

Melker said,

“I believe I saw research last month from Messari that basically said there was no single place where you could put money in an asset class and store any value. And if you stay in cash, you lose 8% of your purchasing power by doing that.”

Related: Deutsche Bank analysts see Bitcoin soar to $28,000 by December

We expect more negativity in the short term

According to Melker, it is important to remember that the current state of the market is weak and “the trend is your friend” in the short term and more downside is likely.

That said, there are some developments that could help the market come out of the recession, including the Fed tightening cycle, which has historically put pressure on asset prices during the first three quarters of the tightening cycle, until the market adjusts, Melker said. new reality.

Melker said,

“My best guess is that we’ve had a very volatile, boring, low-volume, low-liquidity summer. Maybe we set new lows, or maybe from $17.5k to $22,000 or $23,000, something like that. And then, at the end of the year As we get closer, we’re really starting to see what the market consists of.”

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The views and opinions expressed here are those of the author alone and may not necessarily reflect those of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.